Neither Isis, nor I were born in the USA. Isis came to the U.S. as a young child and I as a young adult both fleeing Communist Cuba to legally come to the USA in search of freedom. We both learned very quickly what Thanksgiving and the spirit of gratitude really meant. For Isis back then, it meant being grateful to the nuns that took her in and cared for her while she waited for her parents to come from Cuba. For me, it meant being grateful to a school that opened its doors to me and gave me an Ivy League education.
The central message of Nelson Nash in BYOB is that everybody needs to rely (at least implicitly) on financing for life’s major purchases. Even if you buy a car
with cash, you are forfeiting the opportunity of investing that cash and earning a return on it. So even people who always “pay cash” still experience the same implicit tradeoffs between spending now versus later. Therefore, Nash argues, the real question is whether you are going to obtain your financing from a bank controlled by outsiders, versus a bank that you control.
I spend a lot of time motivating difficult financial topics by constructing “thought experiments.” In a thought experiment, you can only focus on one or maybe two moving parts, while holding everything else constant. This is the
way to isolate the impact of the factor you want to understand. However, it means the whole exercise is necessarily unrealistic
In his classic work Becoming Your Own Banker, Nelson Nash claims that the standard approach to life insurance has things backwards. Consumers have been taught to get their desired death benefit for as little outlay as possible.
When people first hear about the advantages of the Infinite Banking Concept (IBC), a typical reaction is to say, “That’s too good to be true.”