Creating a Personal Bank: Exploring the Infinite banking Strategy


In today’s uncertain economic climate, individuals are increasingly seeking ways to take control of their financial future. One strategy that has gained significant attention is the Infinite banking Strategy, which allows individuals to create their own personal bank. This article will explore the concept of creating a personal bank and delve into the intricacies of the Infinite banking Strategy. So, let’s dive in and understand how this strategy works and how it can benefit you.

What is the Infinite banking Strategy?

The Infinite banking Strategy, popularized by R. Nelson Nash in his book “Becoming Your Own Banker,” is a financial concept that enables individuals to become their own bankers. It involves creating a system where you can borrow money from yourself instead of relying on traditional banks or financial institutions.

How does it work?

The process of creating a personal bank starts with a specially designed whole life insurance policy. Unlike term life insurance, whole life insurance provides coverage for your entire life and also builds up cash value over time. This cash value acts as the foundation for your personal bank.

Here’s how it works: when you pay your premium for the whole life insurance policy, a portion of it goes towards the cost of insurance, while the remaining portion goes into a cash value account. This cash value grows over time, similar to a savings account, and can be accessed through policy loans.

Instead of approaching a traditional bank for a loan, you can borrow money from your own policy, using the cash value as collateral. The borrowed money can be used for various purposes such as purchasing a car, funding education, or even starting a business. The best part is that the interest you pay on the policy loan goes back into your own cash value account, effectively recapturing the interest that would have gone to a traditional bank.

Benefits of the Infinite banking Strategy

1. Financial Control: By creating your own personal bank, you gain control over your financial decisions. You no longer have to rely on banks or financial institutions for loans, and you dictate the terms and conditions of your borrowing.

2. Tax Advantages: The cash value in the whole life insurance policy grows on a tax-deferred basis. Additionally, policy loans are not taxable, making it an attractive option for individuals looking to reduce their tax liability.

3. Asset Protection: The cash value in a whole life insurance policy is protected from creditors in many states, providing an added layer of asset protection.

4. Legacy Planning: The death benefit of the whole life insurance policy ensures that your loved ones are taken care of financially, even after you’re gone.

Frequently Asked Questions (FAQs)

Q: Is the Infinite banking Strategy suitable for everyone?
A: The Infinite banking Strategy may not be suitable for everyone. It requires a long-term commitment and may not provide immediate liquidity. It’s important to consult with a financial advisor to determine if it aligns with your specific financial goals.

Q: How much cash value can I accumulate?
A: The cash value accumulation in a whole life insurance policy depends on various factors, such as the premium amount, policy type, and the performance of the insurance company. A financial advisor can help you estimate the potential cash value accumulation based on your specific circumstances.

Q: Can I borrow the entire cash value from my policy?
A: While you can borrow against the cash value, it’s generally recommended to maintain a certain amount of cash value in the policy to keep it active. Your financial advisor can guide you on the optimal borrowing amount.

Q: What happens if I don’t repay the policy loan?
A: Failure to repay a policy loan can result in a reduction of your policy’s death benefit. It’s crucial to understand the loan repayment terms and diligently repay the borrowed amount to avoid any negative consequences.


Creating a personal bank using the Infinite banking Strategy provides individuals with an innovative approach to take control of their finances. By leveraging a whole life insurance policy’s cash value, individuals can become their own bankers and enjoy the numerous benefits it offers. However, it’s important to carefully assess your financial goals and consult with a financial advisor to determine if this strategy aligns with your specific needs. With proper planning and execution, the Infinite banking Strategy can be a powerful tool to secure your financial future.

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