Becoming Your Own Banker

becoming your own banker

Becoming Your Own Banker, by our mentor R. Nelson Nash, is a unique book that discuses the concept that Nash calls the Infinite Banking Concept.

Banks, large corporations, and the wealthy all around the world have used the same process to generate a lot of wealth. Nash's book finally reveals the secrets.


  • You don't have to be a bank.
  • You don't have to be a corporation.
  • You don't have to be wealthy.

But, this concept, if understood and used, can be your key to wealth.

Opportunity Cost

Nelson Nash explores one of the greatest eroding factors of money, opportunity cost in Becoming Your Own Banker.

"You finance everything you buy. You either pay interest to someone else or you give up the interest you could have earned otherwise."

-R. Nelson Nash

Most do not realize this lost potential. When we buy things like cars, homes, boats, etc., and use our cash or finance through a bank, those dollars leave our money system and along with it, the potential to earn interest.

Let's say you finance a $30,000 car at 5% interest with IOU Bank for 5 years. At the end of 5 years, you would have paid the bank $33,968.22 ($3,968.22 in interest).

That means $33,968.22 are forever gone from your money system and you no longer have the ability to earn interest on those dollars. Instead, let's say that you had that money in a vehicle (no pun intended) earning you 5%.

In 20 years, it would grow to $90,127.80. In 40 years, it would grow to $239,135.89.

20 years 40 years
$90,127.80 $239,135.89

And, we are only talking about one car purchase!

The Concept in Nutshell

Nelson Nash describes how to recapture this lost potential by becoming your own banker. Instead of using the bank to finance your purchases, you use your own personal bank. Infinite Banking utilizes dividend paying whole life insurance policies to build your bank.

However, it's the understanding of the process that makes this strategy such a powerful one. Here's how it works:

  • You build and control your own bank through dividend paying whole life insurance policies.
  • You build cash value within the policy since the premiums paid consist of cash value and the death benefit.
  • When you are ready to purchase an item or pay for a service and you have enough cash value, instead of paying cash or financing it through a bank, you finance the purchase through YOUR bank.

It is pretty simple. You are the customer and the bank. Let's revisit the example above to see what would have happened if you financed it through your Infinite Bank.

Let's say that you had the $30,000 in cash value in a policy that grows 5% per year. Instead of financing the $30,000 with IOU Bank, you finance it through a policy loan.

The insurance company charges a higher interest rate of 8% and you end up paying your policy loan back in 5 years. Here, your total outlay is more than the previous example $36,497.51. By financing through your own bank, you paid $2,529.29 more in interest.

How is this a better strategy if I am paying more interest to the insurance company that Bank IOU?

Remember, you took a policy loan against your cash value. Your cash value acted as collateral so the cash value never left the policy and it continued to earn interest and grow.

By financing through your own personal bank, you have a 5 year old car and $38,288.45 ($30,000 growing at 5% for 5 years) in cash value. You have recaptured the interest that you would have paid to IOU Bank.

Term Cash Interest
Finance Through IOU Bank 5 years -$33,968.22 Paid $3,968.22
Finance Through Infinite Bank 5 years $38,288.45 Earned $8,288.45

Going from being out $33,968.22 (financing through IOU Bank) to having $38,288.45 (financing through your Infinite Bank) is a difference of +$72,256.67

You have gained back the entire cost of the car, the interest, and then some.

Is There a Need?

On average, Americans pay 34.5 cents every dollar to interest while only saving 5-10 cents of every dollar. We pay so much attention to how much interest we are earning on that 5-10 cents, that if we just looked at how much money is lost from the interest charges, we could gain so much more ground.

Becoming your own banker allows you to finance your purchases so that you are paying the interest charges to your banking system and growing your own bank. This is one of the advantages of whole life insurance.

If there isn't a need, there definitely should be a want.


Not a lot of people are aware of this concept revealed in Becoming Your Own Banker, regardless that it uses whole life insurance. Even more unfortunate, a lot of agents in the insurance world are as oblivious. It takes an advisor well versed in the strategy and a special type of insurance policy to effectively and efficiently utilize this process. But this strategy does exist and has been exercised for a very long time.

The Infinite Banking Concept, as described in Becoming Your Own Banker, is the foundation to our financial strategies. It has stood the test of market crashes, the declining real estate market, and bad investment decisions. We are so thankful to have learned about it at such an early age to fully utilize the banking strategy.

But, don't take our word for it. Do your own research. If banks, corporations, and the wealthy do it to build their wealth, why can't you bank on yourself? It starts with an open mind.

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