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Become Your Own Banker by Nelson Nash
Old 01-05-2015, 02:21 PM   #1
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Become Your Own Banker by Nelson Nash

Guy at church hit me up about this one. He was talking about insurance and borrowing from yourself while still earning returns...or something.

I figure somebody on this forum has already put the sniff test on this?

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Old 01-05-2015, 02:32 PM   #2
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Yep, we've talked about it. Very likely a scam.
See this thread.

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Old 01-05-2015, 03:54 PM   #3
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Insurance sales ploy. Saw it marketed as Infinite Banking. The presenter was not even calculating the 5 year compounded growth correctly in his example - good grief.

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Old 01-05-2015, 06:29 PM   #4
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I read the book. Basically, whenever you need a loan, borrow it from yourself and pay yourself interest. Cash out your tax deferred investments, pay the tax, and buy whole(universal) life insurance, which you invest in stocks or whatever. Anytime you need a car loan, etc, borrow from the policy.

In retirement, draw down your cash value.

Mostly just a new sales pitch for life insurance. Not a bad plan if you have (a) met your goals already, (b) have surplus cash and are worried about future tax rates, and/or (c) have already maxed out other vehicles.

Personally, it doesn't make sense for me because (a) I would never need to borrow money. If I don't have the cash, I can't afford it, and (b) I would rather do a ROTH conversion to protect against future tax rates.

That being said, if I suddenly came into significant after tax dollars, I would consider it as another leg in a four legged stool. Or something like that.
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Old 01-06-2015, 08:21 AM   #5
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I've always wondered, how do you borrow from yourself? And do you check your credit report before you approve the loan?

It's just a scam.
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Old 01-07-2015, 12:02 AM   #6
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I tend to lose interest in these sorts of discussion as soon as the word "insurance" is mentioned.
Budgeting is a skill practised by people who are bad at politics.
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Old 01-07-2015, 08:58 AM   #7
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I have no idea what the guy from church is talking about. It may be legit, but even so, it may not be a good deal for you. The Devil is in the details.

Church connections mean nothing. IIRC, Bernie Madoff got a lot of business from people who attended the same synagog as he did.

The worst decisions are usually made in times of anger and impatience.
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