Jack and Jill have decided that they want to relieve themselves of all the unnecessary middlemen that have crowded their financial plan for so many years. They sit down with a very nontraditional financial planner, who understands wealth and its process, and who simply uses products to compliment or enhance the already correct process.

Jack and Jill, following the discussion with their new and improved financial planner, decide they like the control of their money, they don’t ever want to lose it, and they would like some tax advantages as well. They decide to begin creating their own banking system by utilizing an overfunded and maximized participating permanent life insurance policy. They have learned that if they correctly overfund the policy they will have a fully functioning bank after 3 years, wherein every dollar deposited is fully accessible. They have also discovered that they will be able to capitalize their bank in five years, with their total contributions equaling their available cash value, or in other words, they will have a created a very efficient savings account with a death benefit on the side.

Jack and Jill have decided they are going to start redirecting their debt back to themselves and become their own bankers. They begin using the money to redirect all their debt back to themselves, and are now getting the full 11% and 7% they were unnecessarily giving to HSBC and Bank of America in the form of credit card debt and car loans. If you can recall, they were investing in mutual funds returning them 5%, taxable growth, which consisted of the same companies they were indebted to. They have increased their returns dramatically, eliminated all the risk, and within their policy the money will have additional growth and grow tax free. They couldn’t be more pleased.

Jack and Jill also realize that by using their bank they are actually recapturing the principle and interest over time, and that they are dramatically increasing their wealth. They have been borrowing about 15,000 dollars every 4 years for the last 44 years, and they have accumulated nearly 700,000 dollars of cash value. Money they would have lost had they continued on their original path.

“Becoming your own banker” is a very powerful concept about controlling wealth and learning how to maximize the accumulation of it. It is a large misconception that you have to risk money to create wealth. This is incredibly false. By understanding the principles of banking, and using the correct vehicles, you can be in control of your money, and never have to take risk again.

Please watch our video about how to become your own banker, or contact us directly.

Jack is a middle aged guy who works hard to make a living. He is happily married to his wife, Jill, and they have 3 children. They live in an average home, with an average income; they have 2 cars, and some consumer debt. Jack and Jill are who you would call the average American family.

Every other week when Jack gets paid he automatically deposits 300 dollars into his savings account. After a couple years of saving, Jack and Jill decide that it’s time to do some investing; they’ve grown a substantial amount of money, and want to put it to use. They sit down with a financial planner to discuss what they should do, and he points out that there are some mutual funds he knows of that are doing very well. He also indicates that “diversification” is key, and suggests bonds as a great place to allocate some dollars. Does this discussion sound familiar?

Following their meeting with their financial planner, Jack and Jill are convinced that “diversification” is what they need, it makes them feel all warm and cozy inside, as if nothing could ever go wrong. Now instead of getting sidetracked here, discussing the absolutely incorrect principles of traditional financial planning based on “diversification,” “buy and hold,” or “dollar cost averaging,” and their false sense of comfort, let’s realign ourselves with the story at hand, following Jack’s dollars. We will discuss these issues at another time.
Jack and Jill find that they are getting 5-6% returns on their mutual funds (again, a discussion for later on the realities and falsehoods of this generous assumption), coming out to 4-5% after taxes. Not bad right? Something in those mutual funds is producing some strong growth for Jack and Jill’s future retirement. Jack, being very curious, decides to investigate a little more into these mutual funds, and recognizes the two following investments as a substantial part of these funds:

• HSBC Finance Corp
• Bank of America Corp

This find has left Jack a little perplexed, and even more curious, so he decides to further his investigation. He pulls out his bills for the month, and finds one of his credit cards. He reads through the fine print and realizes that he has been paying almost 11% interest on his debt, which doesn’t surprise him, until he realizes why he was so intrigued with the two finds in the mutual fund portfolio… He makes his payments to HSBC! He’s been paying 11% to get 5%!

But it doesn’t end here, Jack still has his car loans to look over. He looks at his payments and finds that he has been paying 7% interest on those loans… to Bank of America! He has been paying 7% to get 5%! What a rip!

Hundreds and thousands of people do the exact same thing as Jack on a regular basis. After all, what are a large majority of the investments out there anyway? Someone else’s debt… or our own! Many search for investments when they have most of the investments they will ever need in their very own financial situation. They risk their money, hoping others will make debt payments in order to satisfy these investments, they get smaller returns, or losses, and in economic times such as these, they lose both money and sleep.

Continuing the story…

Jack realizes that he has a problem. He has created unnecessary middle men in his financial plan. He pays
fees, taxes, and incurs risk unnecessarily. So Jack decides to investigate a little more into his situation, and realizes that if he would eliminate the middle men, invest his money directly into his own personal debt, he will substantially increase his rate of return, never incurs taxes on that growth, eliminate risk, and be in complete control of his money. He seriously thinks it over and wonders why he never realized this before… Have you?

Upon finding more information about the best way to become his own banker, Jack learns that there are also particular vehicles that will allow him to create a pool of money in which he will have additional growth, tax benefits, and the ability to pass on wealth in a most efficient manner.

Jack and Jill now have the relief of knowing they are in complete control of their money, because they are their own bankers. They are at peace knowing that the market environment will not affect their financial future.

Understanding true principles of money is very important when making preparations for your financial future. Wealth is not a product, but is a process. Please be sure contact us for more information about these concepts.

What would you consider to be the biggest factor in creating wealth?

Many would have 3 words in mind, rate of return, but is it?

NO!

The biggest culprits to not creating wealth come in the form of the following:

• Debt
• Interest
• Taxes
• Opportunity Cost

The amount of money that flows away from your circle of wealth is immensely larger than the amount you will ever flow into it by focusing on rate of return.

The average American spends 34 cents of every dollar on interest alone, another undetermined, yet substantial amount on taxes, and saves less than 1. But generously we will take an unaverage American and say he saves 10 cents on the dollar. If he makes 100,000 per year, invests 10,000 and is able to come out with 8% (not calculating taxes), he will have grown an additional 800 dollars. Great, right? Not fully, he is still losing 34,000 dollars to interest alone, making his gains seem insignificant, he has a bucket with holes in it. So what does he do? Does he put more water in? or does he fix the holes first? Is your financial advisor telling you to add more money to your investment pool by reducing your lifestyle, or is he finding money that you would have otherwise lost to contribute to your investment pool? If our unaverage American were able to save merely 1% of his income he would have increased his wealth much more than the rate of return produced, and he would have taken no risk to do so. It would be the easiest money he ever made. What if he could recover 2%, or 3%? What effect would that have in his financial situation?

Patching the holes is the part most advisors miss. By using different techniques and strategies to patch these holes, you could learn how to redirect all the interest back to your circle of wealth by paying yourself that interest, save thousands on taxes, put yourself in control, absolutely eliminate risk, and leave a legacy to pass on to future generations.

So now what if we fill the bucket while the holes are plugged? We are going to need a lot more buckets! Becoming wealthy is not a product, is not based on rate of return, but it is a process, based on controlling the most money you can within your circle of wealth.

Make sure to watch our free video about filling the holes.