Imagine Building Your Own Family Bank 🏦
There’s a powerful yet little-known strategy called privatized banking that only a few communities have fully embraced. Most of us are taught to keep our money in traditional banks or credit unions, where our deposits are used for fractional lending, allowing banks to lend out our money multiple times to generate higher returns. Banks understand the principle of Financial Velocity (more on that another time)—they know how to keep money moving to make even more. To “become your own bank,” you need a financial account that remains both liquid and growth-focused. This is where a permanent life insurance policy comes in. These policies have been around for over a century, serving wealthy families like the Rockefellers, Vanderbilts, and Carnegies as tools for everything from tax mitigation to protecting against market volatility. Thanks to the rise of social media, these strategies are finally reaching a broader audience, allowing middle-class Americans to explore a method once reserved for the elite. Here is a simple yet powerful strategy on how to use a permanent whole life policy to create your own family bank. Step 1: Set Up the Policy To get started, establish a high-cash-value Whole Life insurance policy with a reputable insurer. This type of policy builds cash value alongside the death benefit. By front-loading with a $100k “dump-in,” you boost the cash value from day one, creating leverage that lets you tap into those funds quickly. Make sure it’s set up with features that allow early access to cash. Step 2: 30-Day Waiting Period After making the initial $100k deposit, there’s a 30-day waiting period before the loan can be accessed. During this time, the cash value starts to grow due to interest and dividends (if applicable). Think of it as a short “activation” period to let the funds settle, setting the stage for a loan. After 30 days, you’re ready to borrow! Step 3: Borrow Against Your Cash Value Here’s where the concept of “being your own bank” shines. You can borrow up to 90% of your cash value—so in this case, up to $90k. This policy loan is tax-free and secured by your cash value. It’s generally available at a low interest rate, which is repaid on flexible terms, so you’re in control of the loan’s structure and timeline.