Infinite Banking's #1 Superpower: Control
When people first learn about the Infinite Banking Concept (IBC), they're often drawn to policy loans, guaranteed growth, tax advantages, or death benefit. But after implementing IBC, clients almost always discover that the most powerful benefit—the one that truly transforms their financial lives—is control.
The Problem: Lack of Control in Traditional Banking
Nelson Nash, the creator of the Infinite Banking Concept, identified what he called "the problem" in our financial lives. Simply put, we're constantly financing major purchases throughout our lives—cars, houses, education, businesses, vacations—but we're doing it through outside financial institutions.
When you finance through banks or lenders, who controls everything about that relationship? They do. They decide:
If you qualify based on their criteria
What interest rate you'll pay
The repayment terms
If they'll let you pay it off early
If they'll penalize you for doing so
Where all that interest you pay goes (right into their pockets)
But it doesn't stop there. When was the last time you really thought about who controls the dollars in your 401(k) or other qualified plans? That money is locked away for decades. If you try to access it prior to age 60, you get hit with penalties, taxes, and lost growth. Meanwhile, the institutions holding your dollars create massive returns for themselves that aren't shared with you.
Your home equity faces similar control issues. The money value you put into it is locked up inside the walls of the house. The only way to access it is to sell, or you must ask permission from a bank by filling out endless paperwork and hope they approve you for a HELOC or refinance.
Many people think they're solving this problem by avoiding loans altogether. They save up cash and make purchases outright. But there's still a problem—when you PAY cash for something, you give up all the interest you could have earned on that money. As Nelson Nash said, "You finance everything you buy. You either pay interest to someone else, or you give up interest you could have earned."
This lack of control costs the average American a fortune. Whether through interest payments to banks or opportunity costs from paying cash, most people lose over 30% of their lifetime wealth to financing costs.
The Solution: Control Through Infinite Banking
The solution, according to Nash, is to become your own banker by taking control of the banking function in your own life.
When you implement the Infinite Banking Concept correctly using the cash value of a dividend-paying whole life insurance policy, you create a system where:
You control your capital — You decide when to use it, how to use it, and on what terms. You're not subject to a bank's approval process or their terms and conditions.
You participate in the interest flow — While you pay interest to the insurance company on policy loans (not directly to your policy), you're capturing the spread between what you'd normally pay a bank and what ultimately flows back to you as a policyholder.
You maintain uninterrupted growth — Unlike traditional financing or paying cash, your money continues to grow uninterrupted within your policy, even while you're using that capital elsewhere.
Let me illustrate with an example: Say you're buying a $30,000 car. You have three options:
Option 1: Finance through a dealer or bank at 7% for 5 years. Total interest paid: about $5,600, completely gone from your control.
Option 2: Pay $30,000 cash. No interest paid, but when you PAY that cash, you give up all future growth on that money—that's lost opportunity cost.
Option 3: Use the IBC approach. You borrow $30,000 from your policy's cash value. The insurance company charges you 5% interest. If you're being an "honest banker," you might still budget for that 7% payment you would have made to the bank.
The 5% goes to the insurance company, but you're capturing that 2% spread, which goes directly into building your banking system. Additionally, as a policyholder in a mutual company, you're essentially a part-owner. The profitability of the insurance company—including from policy loan interest—ultimately contributes to the company's ability to pay dividends and maintain strong cash value growth.
Most importantly, your $30,000 in cash value continues growing uninterrupted within your policy even while you're using that money elsewhere.
Which option gives you the most control? Clearly, option three.
The Power of Control in Your Financial Life
This control extends to every aspect of your financial life. Need money for an investment opportunity? You have access to capital. Medical emergency? You have access to capital. Want to help a family member? You have access to capital. No applications, no credit checks, no explaining yourself to a loan officer.
A friend of mine just bought his dream ski cabin in Vail, CO, right on the slopes - a "ski-in-ski-out." He told me that there were many interested buyers who tried to take the deal out from under him. But while his competition was scrambling to secure credit, my friend, because he had control of his own capital via Infinite Banking, he simply called his insurance company and had the money in days. He closed the deal in cash before the competition could even get through underwriting with a bank.
Control brings opportunity and it also brings peace of mind. When you know you have access to capital on your terms, when you're participating in the interest flow rather than just sending it away, when your policy continues growing even while you're using the capital elsewhere—that creates a unique sense of financial security.
Having your own banking system also changes how you interact with traditional banks when you do choose to use them. You're negotiating from a position of strength because you don't desperately need their financing. This often results in better terms and conditions—when you need a bank less, they actually want your business more.
Conclusion: Control Is the Ultimate Benefit
Control is truly the fundamental benefit of implementing the Infinite Banking Concept correctly. It's about:
Taking control of the banking function in your life
Controlling your capital and how it's used
Participating in the interest flow instead of sending it away forever
Maintaining uninterrupted growth on your money
Creating financial certainty in an uncertain world
This control addresses "the problem" that Nelson Nash identified—the constant cycle of financing through outside institutions or losing opportunity cost by paying cash.
By implementing "the solution"—becoming your own banker—you redirect the flow of money, including interest, so it stays within a system where you participate in the profits, rather than flowing out of your control completely.
And ultimately, this control leads to greater wealth, greater peace of mind, and greater financial freedom.
That's why I believe control is the number one benefit of implementing IBC. It's not just about the numbers—although those are certainly important. It's about transforming your relationship with money by putting you in control.
Check out my free mini-course, Supercharging Growth by Adding Financial Certainty
