Creating a Legacy: The Infinite banking Example You Need to Know
Creating a lasting legacy is a goal many individuals strive for. It involves leaving behind something meaningful, not just for the present generation, but for generations to come. While there are various methods to achieve this, one example that stands out is the concept of Infinite banking.
Infinite banking is a strategy that allows individuals to take control of their finances, build wealth, and leave a lasting legacy. It is based on the idea of becoming your own bank, where you can borrow money from yourself and pay yourself back with interest.
Here’s an example to help you understand how Infinite banking works:
Let’s say John wants to create a legacy for his children and grandchildren. He has $100,000 in savings that he doesn’t need for immediate expenses. Instead of leaving it in a traditional savings account, John decides to use Infinite banking to grow his wealth.
John sets up a specially designed whole life insurance policy, which acts as his banking system. He deposits his $100,000 into this policy, and it starts earning a guaranteed minimum interest rate, typically around 4%. This money is now considered his capital.
Over time, John can borrow against his policy’s cash value, which continues to grow tax-free. He can use this borrowed money for various purposes, such as purchasing a car, funding a business venture, or even paying for his children’s education.
Now, here’s where the magic happens. When John borrows money from his policy, he pays himself back with interest. Let’s say he borrows $10,000 and agrees to pay an interest rate of 5%. Instead of paying that interest to a bank, he pays it back to his own policy. This effectively allows him to recapture the interest he would have otherwise paid to an external lender.
As John pays back the loan, the cash value of his policy increases. This means he has more capital to borrow against in the future. The cycle continues, and over time, John’s wealth grows exponentially.
But how does this create a legacy?
As John continues to use Infinite banking, his policy’s cash value keeps growing, even if he borrows against it. This means that even after he passes away, his policy’s death benefit will be larger than the original $100,000 he deposited. This death benefit can be passed on to his beneficiaries, creating a lasting legacy for his loved ones.
In addition to the financial benefits, Infinite banking also offers other advantages. It provides individuals with a sense of control over their finances, as they are not dependent on traditional banks or lenders. It also allows for tax advantages, as the growth within the policy is tax-deferred.
Creating a legacy is not just about leaving behind financial assets. It’s about the values, principles, and knowledge we pass on to future generations. Infinite banking provides individuals with a powerful tool to build wealth, educate their children about financial responsibility, and leave behind a lasting legacy.
In conclusion, Infinite banking is an excellent example of creating a legacy. By taking control of your finances, building wealth, and leaving behind a valuable asset, you can ensure that the benefits of your hard work are enjoyed by future generations. Consider exploring Infinite banking as a strategy to create the legacy you’ve always dreamed of.