Blog 61 – Happy New Year, Happy New Decade

Happy New Year 2020 As we start a new year and a new decade, it is human nature to stop our busy lives for a moment to compare our accomplishments today to what we had planned for ourselves a year or a decade ago.

Although you may be discouraged of your progress in some areas, we are sure that you will be proud of your accomplishments in other areas, and perhaps one of them for many of our clients is your success towards achieving financial independence.

We define financial independence as a financial situation in which you have enough money set aside to take care of unexpected financial challenges and also enough money to take care of opportunities that become available to us. Believe us, when you have money available, opportunities are constantly knocking at your door.

In all cases, to be successful in financial endeavors, you need to have a mentality of prosperity and abundance and avoid by all means to engage your thoughts in scarcity and mediocrity.

We recommend that as soon as you start earning money, you set aside at least 10% of your discretionary income towards savings. This amount should increase to 20% of your income as you reach age 30, and to 30% of your income as you reach age 40.

Money TreeThe question is: “Where should you save this money?” If you follow traditional financial planning, or advice from the government, financial institutions, and Wall Street, the answer they give you is “in qualified plans” and this is the WRONG answer. Although what you are saving is YOUR money, they are placing it in the volatile stock market, and it is in jail between now and the time your turn 59-1/2 years old. If you need access to it, not only you have to pay taxes on it, but you have to pay a 10% penalty. But way a minute, why allow someone to put a penalty for accessing YOUR own money. Don’t be foolish, you don’t have to allow somebody else to have control of your money. You should be in complete control of your money all the time.

“OK fine, I need to be in control of my own money, but where should I save it?” The right answer is that you should save your money in a properly-designed Infinite Banking policy. Not only you get a bonus death benefit because it is a life insurance policy, but there, the money is guaranteed to compound every single day without ever coming down, always earning interest and, although not guaranteed, also earning dividends for over 150 consecutive years. To be honest, compounding is slow and boring for the first few years and then it becomes downright fascinating! There, you are in complete control of your money and if you have an emergency or see an investment opportunity, you have access to cash in the form of policy loans. Remember that you can take a policy loan at a reasonable interest rate with no questions asked, and the money comes from the general account of the insurance company collateralized by your cash value. Meanwhile, your cash value continues to earn interest and dividends and in fact, it is doing double duty for you.

Compounding DollarsWe receive a lot of questions asking how much they should contribute to an IBC policy. The answer is that you should contribute as much as you feel financially comfortable with it: the larger your contribution, the larger your cash value accumulation. These types of policies are designed with a lot of flexibility in the sense that if you go through a difficult financial period, you can either reduce your out of pocket payments or you can take a policy loan to pay the premium. In order to see relatively good financial results, your minimum contribution should be $300 a month if you are younger than 30 years old and $500 a month if you are 30 years old or older. In addition to money to make your contributions, it is extremely important to have self-discipline and patience.

We are also contacted by older potential clients that learned about Infinite Banking in their 50s or 60s and most of them have substantial amounts of money not doing much for them. In some cases, they can transfer that substantial amount of money into a Premium Paid In Advance Fund where the money earns a good rate of return and from which equal amounts of premiums are transferred over a seven or so year period to an IBC policy. These transfers are done over a period of seven years or so to avoid the policy becoming a Modified Endowment Contract or MEC.

A lot of potential clients gets hung up on whether the policy should be a direct recognition policy or if it should be a non-direct recognition policy. The answer is that the design of the policy, the constraints of the insurance company on its products, and the knowledge, ability and experience of the designer are far more important than if the policy is direct or non-direct recognition. We have discussed these issues in a previous blog. Unfortunately, some financial practitioners use this topic to claim that the company they represent is better than the others because theirs is either direct or non-direct recognition.

Now that a new year and a new decade has just started, it is the right time to assess your finances and either start an IBC policy, increase your contributions to your existent IBC policy, or perhaps start your second or third IBC policy.

Thanks to all of you for your support and the trust you have placed in us and receive our best wishes for a great 2020!

Remember, we are always available to advise you on the best way to utilize your IBC policy.

If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at  or feel free to email us your questions at or call us toll-free at 1-844-443-8422.

Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners

We are experts in designing high cash value dividend-paying whole life policies.

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