StackedLife - Authorized Infinite Banking

011 Why Control is Infinite Banking's Superpower
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John Perrings: [00:00:00] The real problem with most people's finances isn't about _*how much*_ money they make or _*where*_ they put it. It's actually about _*who *_controls that money. The average American loses over 30% of their lifetime wealth to financing costs, and almost all of it flows outside of their control. Today we're talking about what I think is the most powerful benefit of Infinite Banking, and it's not what most people think.

This is StackedLife, the podcast that teaches you everything you need to know about The Infinite Banking Concept, whole life insurance, and the strategies that make it all work.

And I'm John Perrings, an authorized Infinite Banking practitioner. I've implemented IBC for hundreds of my clients and educated thousands more. With original content from my podcast, articles, and courses at StackedLife.com.

By the end of this episode, you'll understand why control is the fundamental principle that makes Infinite Banking work and how gaining control over your capital can dramatically transform your financial future.

First, [00:01:00] we'll discuss what Nelson Nash identified as the problem in typical financial systems, and then we'll explore how control or the lack of it impacts every financial decision you make. And then lastly, I'll show you how The Infinite Banking Concept solves this problem by putting you in control of your own banking function.

Why the Biggest Problem is a Lack of Control
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John Perrings: Alright, let's jump into this and talk about what I believe is the most important aspect of The Infinite Banking Concept, and that's control. When Nelson Nash first came out with IBC, he identified what he called "The Problem" in our financial lives.

When you break it down, the problem is that most of us are constantly financing major purchases throughout the course of our lives. Cars, houses, education, businesses, vacations. We're doing it through outside financial institutions. And at first blush we might think, well, yeah, that's how financing works. And it's true. That is how most people think financing has to work. But what if I told you there's another [00:02:00] way? When we finance things through outside institutions, we lose control. We give up control of our money.

We give up control of our interest payments, control of the terms, and control of our access to capital. If you think about it, when you go get a loan from a bank who controls everything about that relationship. The bank controls it. They decide if you qualify based on their criteria. They decide what interest rate you're gonna pay.

They decide the repayment terms. They decide if they'll let you pay it off early and how much they'll penalize you for doing so. And they definitely decide where all that interest you pay goes, which is right into their pockets. And I'm not necessarily saying that this is bad. I'm just saying maybe there's a better way to do this.

Because the thing is the lack of control doesn't stop with, you know, just bank loans. When was the last time you really thought about who controls the dollars in your 401(k), IRA, [00:03:00] 529, or whatever qualified plan? Who really controls the equity you've built up in your house? If you think about your retirement accounts, that money is locked away for decades, and if you try to get to it prior to age 60, you get hit with penalties.

You get hit with taxes. And not to mention the lost growth that happens when you withdraw the money. Meanwhile, the institutions holding your dollars are creating massive returns for themselves, and that part of it is not shared with you. And here's something that I hope it's okay to say to you because it might be a little bit triggering.

Your home is kind of the same thing. The money value you put into it is locked up inside the proverbial walls of the house. The only way to get to it is to sell the house, or you have to ask permission from a bank by filling out endless paperwork and hope they approve you for a HELOC or some type of refinance.

And if we look at the flip side, many people think that they're being smart by avoiding [00:04:00] loans altogether. They save up cash and make purchases outright, which seems good and it is kind of better in some ways, but, there's still a problem here. When you pay cash for something, you're giving up all the interest you could have earned on that money.

And as Nelson Nash said, you finance everything you buy. You either pay interest to someone else or you give up interest you could have earned. That's an economic core principle and you can't get away from it. So whether you're borrowing from outside institutions or paying cash, you're giving up control over your capital, control over the interest flow, and control over your financial life.

And this lack of control is actually costing you a fortune. Let me illustrate with a simple scenario. If you kinda look across the spectrum of what normally happens when people buy cars, most Americans will buy around 10 cars during their lifetime. Let's say you're the type of person who finances [00:05:00] cars. Over your lifetime, you might pay $40,000 to $50,000 in interest to finance those vehicles. That's money flowing directly out of your control and into someone else's financial system. Alternatively, if you're the type that saves up and pays cash, if you're that type of person, you're still losing money because when you pay the cash, you give up all the growth that you could have earned during that time.

This is just called lost opportunity cost, and it can be just as significant, if not even more significant than the interest you would've paid if you borrowed the money. This is the problem that Nelson Nash identified in his book, Becoming Your Own Banker. We're constantly engaged in a financing game, and we're always on the losing side because we lack the control and we lack the capital, by the way.

The Solution is to Become Your Own Banker
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John Perrings: But here's where it gets interesting in the book, Becoming Your Own Banker. The next section is "The Solution." The solution is to become your own banker, quote unquote, to [00:06:00] take control of the banking function in your own life.

This aspect of control is so powerful because it addresses the fundamental sort of "leaking away" of wealth that most people experience throughout the course of their lives. And it's not just about saving a few dollars in interest here and there. It's about participating in the massive flow of interest and redirecting back to you a portion that typically

exits your financial life forever. Nelson often talked about a play about a bank that had four characters in it: the saver, the borrower, the administrator, and the owner of the bank. In typical banking scenarios, you're always the saver and the borrower, but never the owner.

Example: 3 Ways to Buy a Car
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John Perrings: With Infinite Banking, you step into the owner's role, controlling the flow of money, including the interest, and an employee, which is in this case, someone at the insurance company, is administering all of this on your behalf.

Let me give you a quick, concrete [00:07:00] example of how this works in real life. Let's say you're gonna buy a $30,000 car. You have pretty much three options. Option one, you finance through a dealer or a bank. Let's just say the interest rate is 7% over five years. The total interest paid is going to be about $5,600 and the money

you paid is gone and completely out of your control. Option two is you save up the $30,000 in cash and then you buy the car outright, no interest paid, but when you pay that cash, you give up all the future growth on that money. And that's the, that in economic terms, that's called lost opportunity cost.

And then there's option three, which is the Infinite Banking approach. You would borrow the $30,000 from the insurance company collateralized by your cash value, the insurance company would charge you, in this case, 5% interest on the loan, which by the way, this 7% and 5% kind of similar to what's happening right [00:08:00] now.

But here's where it gets interesting. If you're being an honest banker, you might still budget for that 7% payment that you would've made to the bank anyway. And if you do that, what happens? The 5% interest goes to the insurance company. That's what they're charging for the loan.

But now you're capturing that 2% difference between what you would've paid to a bank anyway and what you're paying to the insurance company, and that 2% difference goes directly into your policy to build your financial system and benefit you. Additionally, since you're a policy holder with a mutual insurance company, you're actually a part owner of the mutual insurance company and the profitability of the insurance company, including the 5% interest they collect from you, ultimately

contributes to the company's ability to pay dividends and maintain strong cash value growth. So even the 5% you pay to the insurance company works indirectly to your benefit as a part owner. You're essentially helping maintain [00:09:00] and grow a system that you're an owner of. Most importantly, unlike typical financing, your $30,000 in cash value continues compounding uninterrupted within the policy.

Even while you're using that money elsewhere. You maintain control of both your capital and the growth on that capital. Here's the other super crucial element of this type of control. You decide the repayment terms.

Unlike a bank loan with a rigid payment schedule, you can decide how and when to repay a policy loan. If times get tight, you can adjust your repayment strategy, even going down to zero if you want to. So which option gives you the most control? Obviously, option number three. And this control extends to every aspect of your financial life when you implement IBC correctly,

if you need money for an investment opportunity, you have access to capital, do you have a medical emergency? You have access to capital, wanna help a family member? You [00:10:00] have access to capital. No applications, no credit checks, and no explaining yourself to a loan officer.

And that's really kind of the heart of it. Control brings peace of mind when you know you have access to capital on your terms, when you know you're participating in the flow of interest rather than just sending it away, when you know your policy continues growing, even while you're using the money elsewhere, that creates a unique sense of financial security that you really just can't get in any other type of system.

My Friend Bought His Dream Ski Cabin with IBC
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John Perrings: Now let's also talk about how control relates to your long-term wealth building. When you have control over your capital, you can be more strategic in your investments and financial decisions. You can move more quickly on opportunities without having to go through lengthy approval processes. You can weather economic downturns without being forced to liquidate investments at a loss because you have access to capital through the policy loan provision of your whole life insurance policy. You [00:11:00] know, one of my friends, who by the way, is also an authorized IBC practitioner, he just told me he was able to buy his dream ski cabin in Vail, a ski in, ski out property, right off the lift.

And he was able to do it mostly because he had the money immediately available via policy loan, while others had to go get access to the money first and get approved. Now I want to emphasize something that I think is important. Implementing IBC isn't about never using banks or outside financing ever again. It's a goal to do that. It's a goal to strive towards that, but there are still may be times when typical financing makes sense in certain situations. The main key here is that you have options

now. You're not forced to go to a bank because you have no alternative. In fact, having your own banking system actually makes you a better customer for a typical bank when you do choose to use them.

You are negotiating from a position of strength because you don't [00:12:00] desperately need their financing. You have an alternative. And this often results in better terms and conditions. When people know they can finance a purchase through their policy, they often can approach a bank with more confidence and end up securing better terms.

It is a simple, if not unfortunately, backwards dynamic when you need a bank less, they actually want your business more. Okay. Now let's talk a little bit about how control fits into the bigger picture of IBC itself. Authorized practitioners like to emphasize that IBC is a process, not a product. The life insurance policy itself is a product, and it's the financial tool that we use to implement the process, which is IBC.

The real value comes with how you use this tool to take control of the banking function in your life, and it's about changing how you think about money, financing and cash flow.

There is Only One Pool of Money in the World. How Much of it Do You Control?
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John Perrings: A metaphor that is kind of like what Nelson used in his book. You know, you can think of your financial [00:13:00] life as a river with multiple tributaries flowing from it.

In most people's lives, these tributaries representing interest, payments, fees, taxes, and other things flow away from their main river, diminishing the power of the main river. With IBC, you're essentially redirecting some of those tributaries, so that they flow back into the main river, increasing its strength and flow.

You know, Nelson Nash talked about how there's only one pool of money in the world, and how much of that pool is in your control. This control over the flow of your money is frankly, transformative. It's not about saving a few dollars here and there. It's about fundamentally changing who benefits from the banking function in your life.

And I want to address another common misconception in that implementing IBC is somehow thought of as like "beating" or "cheating" the system. And, and I don't really think that's true. It's more about working and [00:14:00] creating your own system in a more intelligent way that just puts you in control. Life insurance companies have been around for centuries. They're some of the most stable financial institutions on the planet, and when you implement IBC, you're partnering with these institutions in a way that benefits both parties. Because it's a mutual company, the insurance company makes money, which is you as part owner and all the other policy owners in a mutual company, and then you personally gain control in your financial life.

It's a win-win situation and a win-win relationship amongst all the policy owners in a mutual company. This control extends beyond just the financial numbers, so to speak. It's about having control, if I can use the term, your financial destiny. You know, when you're not dependent on banks for financing and you're not at the mercy of the market fluctuations for your savings and investing when you're in control of your financial life, that transforms how you [00:15:00] think about money and how you make financial decisions altogether. This sense of control reduces stress and anxiety about money, it gives you confidence in your financial future, it allows you to make decisions based on what's best for you and your family. Not just what's available based on someone else's criteria, we can get away from that world of invest, invest, invest of just whatever's in front of you, and now we can become discerning investors and make decisions based on what's best for us under our control.

So to sum up what we covered today, you know, control is the fundamental benefit, in my opinion, of implementing The Infinite Banking Concept. It's about taking control of the banking function in your life, controlling your capital, controlling the interest flow, and controlling your financial destiny. This control addresses the biggest problem, the constant cycle of financing through outside institutions or losing opportunity cost by paying cash, by [00:16:00] implementing the solution of Becoming Your Own Banker, you redirect the flow of money, including interest, so that it stays within a system where you participate in the profits rather than it flowing out of your control completely into someone else's financial system where they benefit from the profits. This control extends to every aspect of your financial life, from day-to-day purchases, to major investments, from emergency funds to retirement planning, and ultimately this control leads to greater wealth,

greater peace of mind and greater financial freedom. And this is why I believe control is the number one benefit of implementing IBC. It's not about the numbers, although those are certainly important. It's about transforming your relationship with money by putting you in control. If any of this was resonating with you.

Head over to StackedLife.com and you can book a free 30 minute consultation with me right there, and we can talk about you and how some of these principles could apply directly in your life. Or if you'd like to just continue [00:17:00] learning more, I'd like to offer you something new. I'm holding a live webinar, "Infinite Banking 101." This is a real live webinar hosted by me, not one of those fake live webinars. And you can join and I'll walk you through the basics of Infinite Banking, and then open it up to a Q&A where you can get all your questions answered.

You can check that out at StackedLife.com/ibc101. Hope to see you there.