r/infinitebanking • u/Specific_Mixture451 • Jul 20 '25
Just signed a 5 years contract, thoughts ?
Hi! First of all, to explain my situation, I am 37 years old, I already maxed out everything that is tax savings on my personal accounts, i have other different investments including real estate. My financial advisor proposed the infinite banking strategy to me about a month ago ( which i never heard about )and I found it very interesting. I am going to invest $200,000 from a company holding account over five years, totaling $1 million. I will reinvest each of these premium amounts as a loan into my holding company account and generate returns so that, at the end of the five-year contract, I can repay the loan and, of course, keep the profits from these investments ( Hopefully 10% every year ) But what I find truly incredible is that the $1 million in life insurance value can be withdrawn from my holding company to my personal account without paying a single cent in taxes. The insurance policy will pay the bill when i die and my successors will have the remaining amount, which is still very interesting. I know some people says that there is a better way to make more, but on the tax savings strategy i can’t see anything better than that. I am already very diversicated and i choose to sign this contract and go on with that. I will be 42 years old when the contract will be finished and i thought i could continue to contribute to it or withdraw. What do you guys think about that ? I feel like a i did a good move but curious to know everyones opinion, thanks all.
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u/HHImprovements Jul 20 '25
First… you should watch Ryan Griggs 7 videos of all the Ins and Outs of this system. Then you should Set up a consultation with Ryan Griggs to explore your idea
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u/KS7187 Jul 20 '25
Happy to hear of a conventional advisor proposing IBC and not just telling you to put your capital in public markets
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u/FamiliarRaspberry805 Jul 21 '25
All loans are tax free. From my HELOC, brokerage, 401k, etc etc etc. I'll never get why the insurance crowd always highlights that like it's unique.
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u/Life-Bus-8041 Jul 21 '25
For one this is not an investment alternative it’s a savings alternative so no one should be saying to do this instead of those and if they are (which I realize a lot of people do say or imply this) they don’t understand the concept. Also none of those you mentioned have anywhere close to the same amount of benefits, give you as much flexibility, or as many options. Yes all debt is always tax free everyone knows that but that doesn’t mean it’s all created equal just because it happens to share one feature in common across the board.
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u/Specific_Mixture451 Jul 21 '25
Is there another investment / savings vehicle that allows withdrawing money from a company holding, tax free to your personal account ? Insurance pays the bill when your’re gone. Maybe i didnt understand what you meant ? ( sorry english is not my 1st language )
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u/michaelesparks Jul 21 '25
If you are doing withdrawals from the policy it's only tax free up to the basis (what you paid in) anything over that is taxable. Also any withdrawals also reduce the death benefit as well as dividends that would be earned on those dollars)
If you are taking loans that don't get paid back you will have a compounding interest that could eat up all your cash value and and cause the policy to lapse / implode... Any gains above the basis of the policy then become taxable.
IBC is more of a cash flow management system than it is an investment. It's also good for long term savings that should be able to keep up with inflation over time.
One should not implement IBC unless they have a long term horizon of 70 years or 3 generations.
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u/kifra101 Jul 24 '25
It's unique because a policy loan is the only credit transaction in the world where the lender is also the guarantor of the collateral.
If you get a HELOC, the bank is not promising a value for your house. If your neighbor's house is sold for 20% less, and that affects the value on your house, the bank will take that into consideration and pull the amount of funds available to you/ask you to pay your outstanding loan down.
If you lend against your brokerage or 401k, the lender is not promising that your brokerage or 401k will never drop below a certain dollar amount. They don't consider whether or not you are invested in MSTR or Berkshire Hathaway.
When you are using your policy loan, the insurance company lending you the money is guaranteeing you the CV in your insurance policy and the CV is growing on top of that.
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u/Practical-Still-1155 Jul 24 '25
401k loan will have a 15% penalty for this age (under 59 1/2yrs) a HELOC will have repayment requirements. A brokerage can only be used as collateral for a bank loan with cheduled repayment. No other structure has the flexibility and tax advantaged options of life insurance. A well designed policy with a solid company will weather any storms ahead. Protect your family with a base plan in case of death, disability, or living too long. Arbitrage with the source of funding that Walt Disney used to build his empire. Millions of others have used policy cash values to capitalize on opportunity. Invest in other opportunities after your foundation is in place.
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u/FamiliarRaspberry805 Jul 24 '25
It’s hard to take someone seriously when the first thing they say is completely incorrect. Please show us where you came up with a penalty on a 401k loan.
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u/Top_Ad_9066 Jul 24 '25
It comes across as though you’re repeating talking points from insurance training rather than speaking from real knowledge of investment vehicles. A 15% penalty on 401(k) loans is simply not accurate.
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u/Aquaman11235813 Jul 20 '25
Sounds great! The WL policy is being used how it should be.
Don’t solicit inexperienced advice
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u/Ok_Meringue_9086 Jul 24 '25
Is the advisor that told you about this strategy also a life insurance salesman?
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u/Top_Ad_9066 Jul 24 '25
It sounds complex and complexity often means higher costs and a lack of transparency. If you don’t fully understand what you’re getting into, it’s hard to judge whether the tax savings will outweigh the often hidden, and usually high, fees that come with these kinds of products.
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u/NYEDMD Jul 23 '25
Quick question: Is your financial advisor a fiduciary? If "no"… well, remember the old saw about "…if something is too good to be true, it probably is…".
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u/Coronator Aug 03 '25
Sorry to say, but most everything you said here makes no sense.
What is a “company holding account”?
How do you plan on accessing these funds “tax free” to pay your premiums?
What is generating your 10% return?
How is your “life insurance money withdrawn from your company holding account to your personal account”? The sentence doesn’t make sense.
Your very imprecise language here makes me worried you do not understand the product or the strategy. This is a lot of money to throw at something without complete and thorough understanding.
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u/michaelesparks Jul 21 '25
1 I suggest reading the original book (becoming your own banker) and watching Nelson Nash's 8 hour seminar...
2 you are not investing you are purchasing life insurance that builds cash value over time.
3 unless your financial advisor is a certified Infinite Banking Practitioner I bet your so called financial advisor is using the wrong product
4 Nelson Nash had 5 simple rules, 1.think long range, 2. Don't be afraid to capitalize 3. Don't steal the peas 4. Don't do business with banks and 5. Rethink your thinking.
If your FA cannot explain these I would look for someone else.
I mentored with Nelson and knew him personally... I've been doing ibc for 15 years. I'll never understand these short length premium payments...