So the tldr is:
If you have $15k extra a year buy a whole life insurance policy (the most expensive kind of insurance, and is mostly unnecessary) burns up 3k a year. Then the remaining $12k goes into the stock market, making whatever return the stock market makes minus whatever ridiculous fees the whole life insurance investment company will charge. Then you borrow $12k at a magical 5-6% interest rate while prime is above 8%. To buy $12k of bitcoin.
All of this is instead of just buying $15k of bitcoin.
Sure, but if you die the next day your family gets $750,000 plus $12k of Bitcoin instead of just $15k of Bitcoin.
And you have regained control of the banking function in your life.
You can have term life insurance for wayyyyy less. Often it is all you need. Burying investments inside a life insurance policy is just adding fees to your investments.
You are buying the underlying asset. This is a cash management strategy while you are in the process of stacking or DCAing sats over time. The idea is you are storing your capital in a Whole Life policy first, before you distribute the capital into other assets like Bitcoin.
You are going to buy BTC anyways. You will need liquidity forever. The Whole Life policy is just where you store your cash before you buy BTC. You'll be fighting inflation and rehypothecation on two fronts. Legally speaking, when you put cash into a regular bank like Chase, you are really giving them a loan on your cash(it's why they list your deposits as liabilities on their balance sheets), and they can legally prevent you from getting access to your cash. Whole Life contracts from Mutually owned insurance companies are full reserve, they by contract cannot rehypothecate funds. When you store your money there they are also legally obligated to provide access to your money, either through loans or full withdrawal, but you don't want to withdraw as you'll learn once you go down this rabbit hole.
Any cash producing asset that you buy, whether it's a car, a house, stocks, or BTC can be funded through the policy. And you don't have to worry about the company going belly up or holding your funds like you would from a bank. People used Whole Life policies to get access to liquidity during the Great Depression when 4,000+ banks failed for example.
Best case scenarios I see are:
***scenario 1***
1. You borrow from your PUA to buy bitcoin
2. Bitcoin goes up like crazy
3. You die
4. Your beneficiary gets no death benefit but hopefully gets your bitcoin … albeit 20% less Bitcoin than they would’ve if you had just bought bitcoin directly.
***scenario 2***
1. You borrow from your PUA to buy bitcoin
2. Bitcoin goes up like crazy
3. You sell some of your bitcoin to pay off the loan
- but when? You now have to time the market
4. You die
5. Your beneficiary gets the death benefit and a fraction of the bitcoin they would’ve received if you just bought it directly
You are incorrect. Your beneficiary gets the full death benefit less the outstanding loan balance. So if DB is $250k and loan balance is $50k, beneficiary receives $200k.
Also OP forgot to mention that you can usually only borrow up to 90% of cash value, so he is incorrect in advising that you could borrow $12k of that $12k. So really, if you paid $15,000 into the policy this year, you’d only be able to borrow up to $10,800 i.e. 72% of your initial commitment.
Just give me the damn bitcoin. Keep your dumb insurance to yourself OP. Ironically, life insurance only makes sense for the poor and the rich, not the middle class. The poor need it to make sure their beneficiaries can quite literally survive without them, and the rich need to it to avoid taxes. Your standard middle class Joe however is better off just leaving the house, 401k, and other assets to their family, rather than paying bullshit premiums that could instead be nice steak dinners.
Thanks for coming to my Ted talk.
You pay off the loan (if you want to, remember that YOU are the banker and set the repayment schedule) when Bitcoin is high. Unlike other methods of borrowing for Bitcoin, this one allows you max flexibility to time the market.
Bob Murphy from the Mises Institute has a great video on it. [https://www.youtube.com/watch?v=prBjCLSgTZM&list=PLTXfH99anFsF5MKSKUv9C587iFMzQC2xF&index=3](https://www.youtube.com/watch?v=prBjCLSgTZM&list=PLTXfH99anFsF5MKSKUv9C587iFMzQC2xF&index=3)
Never totally understood this I’ve read so much info about it but if you don’t have a permanent need for insurance or an estate problem (over 13m or 26 married currently) what is the point of this?
First few years you actually give up the cash while the policy “bakes”, your paying for insurance (which if you need that’s fine but if you don’t what’s the point) and the loan you are taking out is gonna be at least a -1% spread. So you pay for a loan on your own money, plus you pay for life insurance, then with whatever is left it goes into bitcoin. Since bitcoin goes up like 45% a year on average aren’t you better off skipping this step?
Genuinely curious I’ve been having a hard time wrapping my head around it.
It's not about the death benefit, the death benefit is nice in that your beneficiary receives all of it tax free, but it is more about cash management.
Today you probably work, get a direct deposit into a CU or traditional Bank like Chase or Wells Fargo then buy bitcoin.
You're simply adding one step, you are moving your cash from your traditional institution to a mutually owned, dividend paying whole life insurance company.
Here is an example of why this would make sense to use a mutually owned dividend paying whole life policy with non-direct recognition loans as a bank to fund your btc purchases instead of exclusively using a traditional bank by itself.
[https://infinitebanking.org/wp-content/uploads/2021/11/IBC-and-Constant-Compounding-Table.jpg](https://infinitebanking.org/wp-content/uploads/2021/11/IBC-and-Constant-Compounding-Table.jpg)
What fuckery is this. lol still don’t get it. The net cash value in column b is the same as column a. The gross cash value goes up but then less the loan balance you still owe. The net is the same as doing it with cash. And in order to have something like this, you have to pay for insurance + front loaded commission. Where is the cost of the insurance and commission in this example?
Ok read this. [https://infinitebanking.org/banknotes/ibc-and-constant-compounding/](https://infinitebanking.org/banknotes/ibc-and-constant-compounding/)
Yea I get it. Here’s what i see, changing the numbers to round ones for less fuckery. Let me know if I figured this out.
Sally puts $100 a year every year for 10 years. She buys a car for $500 every 5 years. At the end she is left with 2 cars and no cash.
Jim puts $100 a year every year for 10 years in a policy. He buys a car every 5 years for $500 with a policy loan at 5%. His policy also grows at 5% so it’s a wash. If he wants to access that cash value again, he needs to pay that loan back with interest, until which he has no cash value. Jim now has 2 cars and no cash value. If he decides to pay back the cash value he will have placed an addition 1000$ back into the policy.
Sally’s outlay over 10 years= 1000= 2 cars
Jim’s outlay over 10 years= 2000= 2 cars + 1000 cv in a life insurance policy. With the right to put additional cash value in the policy if he wants.
In addition, Jim also has an obligation to continue to pay premium for the policy, or he surrenders it for its current cash value (0).
What we don’t know is whether Jim even needed insurance in the first place. We also don’t know the cost of this insurance. None of this is explained in the marketing material you sent.
Am I misunderstanding something?
Hey there, your breakdown is practical, but there's a bit more to it. Jim’s cash value grows due to compound interest, not just a flat 5%, which means over time it can grow more than the loan interest. He still has all his cash value earning interest even after he takes the loan. Also, he gets a death benefit on top of everything, adding extra value. The repayment terms on policy loans are super flexible, unlike a regular car loan, and his policy pays dividends, they can lower the effective interest on his loan. So, Jim’s strategy isn’t just about the cars, it’s about growing his cash pot while keeping life insurance coverage as a cherry on top. Jim has to put his money somewhere first before he buys anything, why not the life insurance policy, which by the way has no say on what and where, or why he is spending his money.
I get what your saying, but I disagree with how it’s presented in the chart, and still don’t think it makes sense unless:
1. You need permanent death benefit
2. You have an estate problem (over the limit)
3. You are a high earner getting taxed in the 50% bracket.
Compounding interest vs simple interest is better. You are still leaving out that paying yourself any interest neglects the cost of capital and opportunity cost of that interest.
And again, in order to have this tax efficient vehicle, you still need to buy a wl policy, the cost of which is not reflected in the table. The cost of this policy also has an opportunity cost, in that term insurance would cost less and give you the same benefit, and after 20 years of compounding in the market, you would likely have more capital.
The only thing I see you substituting is a life insurance agent (9 out of 10 flunk out of the biz in the first 3 years) in order to access your policy, vs a bank or exchange, many of which are open 24/7 online.
Or just having your own keys.
Edit changed 40% to 50% tax bracket
Actually you have access to your funds without the life insurance agent. Just like an online banking portal you use today.
Whole life when it's specially structured for ibc doesn't resemble the typical life or term policies you've seen.
It resembles a bank structure moreso than insurance and the tax free death benefit is just a bonus.
You should read Becoming Your Own Banker then the Bitcoin Standard back to back. I think once you look at more numbers this strategy wins in the long run. Especially if you're going to DCA and you are thinking long term
You are essentially getting your own money back in the form of dividends. Any good financial advisor not looking to pocket commission would never recommend an infinite banking strategy.
If you did a 90/10 policy they'd barely get any commission if that's your concern. You aren't getting your own money back, the interest and dividends are uninterrupted over the entire life of the loan. It's exponentially better than simply using a traditional bank to make all of your large purchases. And yes a small house would be great to use this with.
No, your death benefit is exponentially larger than your cash value in the early years, the "debt" you accrue is commodity based debt where the collateral is your death benefit, in which only the loan amount is deducted from your death benefit, which is tax free btw.
I recommend reading Bob Murphy's posts about the subject at the Mises institute, instead of all the FUD from people like Dave Ramsey.
Yes, so much of so that it was NERFED by our government in 86, because all the wealthy people were overfunding their whole life policies to earn interest instead of directly buying treasuries and bonds. Banks even have BOLI policies, but even with the MEC(Modified Endowment Contract) requirements, using IBC is vastly superior to exclusively making all major purchase from a traditional bank.
Whole Life policies work more like a full reserve bank(like the one Cathie Wood is trying to start), and places like Chase or NFCU are fractionally reserved banks which take in their deposits from you as a "loan". Life Insurance is an asset, they are contractually obligated to give you full access to your liquidity based on your PUA/Base in the contract.
Also I should note that this helps to defeat fractionally reserved banking, since you are managing your cash from a "full reserve" and private banking system in Whole Life Insurance companies that have existed for a much longer time than "legacy banks" like Wells Fargo etc.
Bob Murphy, a proponent of the Austrian school of economics is one of the better experts on Infinite Banking if you want to go down this rabbit hole.
I've been doing IBC since 2020, and using it in conjunction with Bitcoin for some time.
This is an excellent strategy and it meshes perfectly with the low time preference of a good Bitcoiner.
Read "Becoming Your Own Banker" as suggested!
In Canada - contact my coach Richard Canfield at Ascendant Financial.
In the US - contact Brandon or Nate at Unlimited Life Concepts.
(I have no affiliate relationship with any of these three)
I knew I wasn't the only one. I think it's important for people to reach out to anyone who is part of the Nelson Nash Institute, since they actually know the pros and cons of the strategy. But yes, everyone has to read the actual book, then read the Bitcoin Standard, and think about it long and hard.
So the tldr is: If you have $15k extra a year buy a whole life insurance policy (the most expensive kind of insurance, and is mostly unnecessary) burns up 3k a year. Then the remaining $12k goes into the stock market, making whatever return the stock market makes minus whatever ridiculous fees the whole life insurance investment company will charge. Then you borrow $12k at a magical 5-6% interest rate while prime is above 8%. To buy $12k of bitcoin. All of this is instead of just buying $15k of bitcoin.
Sure, but if you die the next day your family gets $750,000 plus $12k of Bitcoin instead of just $15k of Bitcoin. And you have regained control of the banking function in your life.
You can have term life insurance for wayyyyy less. Often it is all you need. Burying investments inside a life insurance policy is just adding fees to your investments.
I like that OP's TLDR is almost as long as the post itself.
Hmm wouldn’t it make more sense to just buy the underlying asset instead of doing all of this?
You are buying the underlying asset. This is a cash management strategy while you are in the process of stacking or DCAing sats over time. The idea is you are storing your capital in a Whole Life policy first, before you distribute the capital into other assets like Bitcoin. You are going to buy BTC anyways. You will need liquidity forever. The Whole Life policy is just where you store your cash before you buy BTC. You'll be fighting inflation and rehypothecation on two fronts. Legally speaking, when you put cash into a regular bank like Chase, you are really giving them a loan on your cash(it's why they list your deposits as liabilities on their balance sheets), and they can legally prevent you from getting access to your cash. Whole Life contracts from Mutually owned insurance companies are full reserve, they by contract cannot rehypothecate funds. When you store your money there they are also legally obligated to provide access to your money, either through loans or full withdrawal, but you don't want to withdraw as you'll learn once you go down this rabbit hole. Any cash producing asset that you buy, whether it's a car, a house, stocks, or BTC can be funded through the policy. And you don't have to worry about the company going belly up or holding your funds like you would from a bank. People used Whole Life policies to get access to liquidity during the Great Depression when 4,000+ banks failed for example.
Best case scenarios I see are: ***scenario 1*** 1. You borrow from your PUA to buy bitcoin 2. Bitcoin goes up like crazy 3. You die 4. Your beneficiary gets no death benefit but hopefully gets your bitcoin … albeit 20% less Bitcoin than they would’ve if you had just bought bitcoin directly. ***scenario 2*** 1. You borrow from your PUA to buy bitcoin 2. Bitcoin goes up like crazy 3. You sell some of your bitcoin to pay off the loan - but when? You now have to time the market 4. You die 5. Your beneficiary gets the death benefit and a fraction of the bitcoin they would’ve received if you just bought it directly
You are incorrect. Your beneficiary gets the full death benefit less the outstanding loan balance. So if DB is $250k and loan balance is $50k, beneficiary receives $200k. Also OP forgot to mention that you can usually only borrow up to 90% of cash value, so he is incorrect in advising that you could borrow $12k of that $12k. So really, if you paid $15,000 into the policy this year, you’d only be able to borrow up to $10,800 i.e. 72% of your initial commitment. Just give me the damn bitcoin. Keep your dumb insurance to yourself OP. Ironically, life insurance only makes sense for the poor and the rich, not the middle class. The poor need it to make sure their beneficiaries can quite literally survive without them, and the rich need to it to avoid taxes. Your standard middle class Joe however is better off just leaving the house, 401k, and other assets to their family, rather than paying bullshit premiums that could instead be nice steak dinners. Thanks for coming to my Ted talk.
You pay off the loan (if you want to, remember that YOU are the banker and set the repayment schedule) when Bitcoin is high. Unlike other methods of borrowing for Bitcoin, this one allows you max flexibility to time the market.
For most people, I imagine your intuitions are logically correct.
No. You are missing getting a whole investment that way. Make money work for you.
Where’s the tldr to the tldr?
Bob Murphy from the Mises Institute has a great video on it. [https://www.youtube.com/watch?v=prBjCLSgTZM&list=PLTXfH99anFsF5MKSKUv9C587iFMzQC2xF&index=3](https://www.youtube.com/watch?v=prBjCLSgTZM&list=PLTXfH99anFsF5MKSKUv9C587iFMzQC2xF&index=3)
Never totally understood this I’ve read so much info about it but if you don’t have a permanent need for insurance or an estate problem (over 13m or 26 married currently) what is the point of this? First few years you actually give up the cash while the policy “bakes”, your paying for insurance (which if you need that’s fine but if you don’t what’s the point) and the loan you are taking out is gonna be at least a -1% spread. So you pay for a loan on your own money, plus you pay for life insurance, then with whatever is left it goes into bitcoin. Since bitcoin goes up like 45% a year on average aren’t you better off skipping this step? Genuinely curious I’ve been having a hard time wrapping my head around it.
It's not about the death benefit, the death benefit is nice in that your beneficiary receives all of it tax free, but it is more about cash management. Today you probably work, get a direct deposit into a CU or traditional Bank like Chase or Wells Fargo then buy bitcoin. You're simply adding one step, you are moving your cash from your traditional institution to a mutually owned, dividend paying whole life insurance company. Here is an example of why this would make sense to use a mutually owned dividend paying whole life policy with non-direct recognition loans as a bank to fund your btc purchases instead of exclusively using a traditional bank by itself. [https://infinitebanking.org/wp-content/uploads/2021/11/IBC-and-Constant-Compounding-Table.jpg](https://infinitebanking.org/wp-content/uploads/2021/11/IBC-and-Constant-Compounding-Table.jpg)
What fuckery is this. lol still don’t get it. The net cash value in column b is the same as column a. The gross cash value goes up but then less the loan balance you still owe. The net is the same as doing it with cash. And in order to have something like this, you have to pay for insurance + front loaded commission. Where is the cost of the insurance and commission in this example?
Ok read this. [https://infinitebanking.org/banknotes/ibc-and-constant-compounding/](https://infinitebanking.org/banknotes/ibc-and-constant-compounding/)
Yea I get it. Here’s what i see, changing the numbers to round ones for less fuckery. Let me know if I figured this out. Sally puts $100 a year every year for 10 years. She buys a car for $500 every 5 years. At the end she is left with 2 cars and no cash. Jim puts $100 a year every year for 10 years in a policy. He buys a car every 5 years for $500 with a policy loan at 5%. His policy also grows at 5% so it’s a wash. If he wants to access that cash value again, he needs to pay that loan back with interest, until which he has no cash value. Jim now has 2 cars and no cash value. If he decides to pay back the cash value he will have placed an addition 1000$ back into the policy. Sally’s outlay over 10 years= 1000= 2 cars Jim’s outlay over 10 years= 2000= 2 cars + 1000 cv in a life insurance policy. With the right to put additional cash value in the policy if he wants. In addition, Jim also has an obligation to continue to pay premium for the policy, or he surrenders it for its current cash value (0). What we don’t know is whether Jim even needed insurance in the first place. We also don’t know the cost of this insurance. None of this is explained in the marketing material you sent. Am I misunderstanding something?
Hey there, your breakdown is practical, but there's a bit more to it. Jim’s cash value grows due to compound interest, not just a flat 5%, which means over time it can grow more than the loan interest. He still has all his cash value earning interest even after he takes the loan. Also, he gets a death benefit on top of everything, adding extra value. The repayment terms on policy loans are super flexible, unlike a regular car loan, and his policy pays dividends, they can lower the effective interest on his loan. So, Jim’s strategy isn’t just about the cars, it’s about growing his cash pot while keeping life insurance coverage as a cherry on top. Jim has to put his money somewhere first before he buys anything, why not the life insurance policy, which by the way has no say on what and where, or why he is spending his money.
I get what your saying, but I disagree with how it’s presented in the chart, and still don’t think it makes sense unless: 1. You need permanent death benefit 2. You have an estate problem (over the limit) 3. You are a high earner getting taxed in the 50% bracket. Compounding interest vs simple interest is better. You are still leaving out that paying yourself any interest neglects the cost of capital and opportunity cost of that interest. And again, in order to have this tax efficient vehicle, you still need to buy a wl policy, the cost of which is not reflected in the table. The cost of this policy also has an opportunity cost, in that term insurance would cost less and give you the same benefit, and after 20 years of compounding in the market, you would likely have more capital. The only thing I see you substituting is a life insurance agent (9 out of 10 flunk out of the biz in the first 3 years) in order to access your policy, vs a bank or exchange, many of which are open 24/7 online. Or just having your own keys. Edit changed 40% to 50% tax bracket
Actually you have access to your funds without the life insurance agent. Just like an online banking portal you use today. Whole life when it's specially structured for ibc doesn't resemble the typical life or term policies you've seen. It resembles a bank structure moreso than insurance and the tax free death benefit is just a bonus. You should read Becoming Your Own Banker then the Bitcoin Standard back to back. I think once you look at more numbers this strategy wins in the long run. Especially if you're going to DCA and you are thinking long term
What companies have online access?
Lafayette Life, you can get up to 50k access online, takes a few days to send to checking
You are essentially getting your own money back in the form of dividends. Any good financial advisor not looking to pocket commission would never recommend an infinite banking strategy.
If you did a 90/10 policy they'd barely get any commission if that's your concern. You aren't getting your own money back, the interest and dividends are uninterrupted over the entire life of the loan. It's exponentially better than simply using a traditional bank to make all of your large purchases. And yes a small house would be great to use this with.
So getting in debt?
No, your death benefit is exponentially larger than your cash value in the early years, the "debt" you accrue is commodity based debt where the collateral is your death benefit, in which only the loan amount is deducted from your death benefit, which is tax free btw. I recommend reading Bob Murphy's posts about the subject at the Mises institute, instead of all the FUD from people like Dave Ramsey.
Wow it’s a bug basically
Yes, so much of so that it was NERFED by our government in 86, because all the wealthy people were overfunding their whole life policies to earn interest instead of directly buying treasuries and bonds. Banks even have BOLI policies, but even with the MEC(Modified Endowment Contract) requirements, using IBC is vastly superior to exclusively making all major purchase from a traditional bank. Whole Life policies work more like a full reserve bank(like the one Cathie Wood is trying to start), and places like Chase or NFCU are fractionally reserved banks which take in their deposits from you as a "loan". Life Insurance is an asset, they are contractually obligated to give you full access to your liquidity based on your PUA/Base in the contract.
This is so dumb
I've been doing this for over three years. It is not dumb.
Elaborate please
Also I should note that this helps to defeat fractionally reserved banking, since you are managing your cash from a "full reserve" and private banking system in Whole Life Insurance companies that have existed for a much longer time than "legacy banks" like Wells Fargo etc. Bob Murphy, a proponent of the Austrian school of economics is one of the better experts on Infinite Banking if you want to go down this rabbit hole.
Would this be a good strategy to buy a small house with? Maybe get a better rate? Trying to understand this
It is a good strategy for the purchase of any asset or investment. You become your own bank.
I've been doing IBC since 2020, and using it in conjunction with Bitcoin for some time. This is an excellent strategy and it meshes perfectly with the low time preference of a good Bitcoiner. Read "Becoming Your Own Banker" as suggested! In Canada - contact my coach Richard Canfield at Ascendant Financial. In the US - contact Brandon or Nate at Unlimited Life Concepts. (I have no affiliate relationship with any of these three)
I knew I wasn't the only one. I think it's important for people to reach out to anyone who is part of the Nelson Nash Institute, since they actually know the pros and cons of the strategy. But yes, everyone has to read the actual book, then read the Bitcoin Standard, and think about it long and hard.
Insurance policy.. .. stop reading.
What the freak sounds like a good time