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Updated over 3 years ago on . Most recent reply
Infinite Banking Concept, Cash Flow Banking, or Bank on Yourself
Has anybody used a IBC, CFB, or BOY policy to purchase real estate and use the returns to pay back the policy at higher interest rates than the policy charges? If so, what are the pros and cons? What are your thoughts about IBC, CFB, or BOY? Thanks.
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![Jim Kindred's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/21312/1621361256-avatar-bankerjim.jpg?twic=v1/output=image/cover=128x128&v=2)
Interesting responses from those who admittedly have only HEARD about the idea but have no practical understanding of how Privatized Banking actually works. Those who think the Infinite Banking Concept is about life insurance (AKA Death Benefit) are missing the concept all together.
Banking is a CONCEPT, not a product. Infinite Banking is designed around the radical idea that YOU (the owner of policy designed for maximum efficiency) should be the First Beneficiary of the policy; with your family being the secondary beneficiaries. As the first beneficiary you have access to guaranteed cash values that form the basis of what will become your privatized financing system. Properly designed and used, a Dividend Paying Whole Life Contract from a Mutual Insurance Company makes an incomparably great base from which to conduct a financing BUSINESS (right alongside your Real Estate Investing Business).
HOLDING your cash in a tax-advantaged environment until you USE it for banking purposes during your accumulation years, then converting profits from your Real Estate into tax free dollars at retirement provides privileged access to cash on demand with non-structured loan repayments... that may even be tax deductible.
When you understand and can emulate the way traditional banks have made money for the past 5,000+ years, you suddenly realize that owning your own tax-advantaged financing system will make your good (Real Estate) investment even better, and that financing may well be more profitable to you than your investment.
Did you spend time learning how to successfully invest in Real Estate? Then you spend time and energy to understand Privatized Banking from someone who has used this concept with REAL deals. For example, with banking, there are two Internal Rates of return, plus the External Rate of Return and the Death Benefit (the Eternal Rate of Return). Learning the benefits and uses of all four, beats solely relying on Real Estate Returns.