Why Shouldn’t You Put All of Your Money Into Infinite Banking

It happened again….

I get SO MAD every time I see insurance agents screwing people over with policies.

In this episode, I am doing an apples-to-apples comparison of my friend’s whole life insurance policy he was going to get with another agent compared to my policy for him.

Spoiler, our policy is better.

It’s time to have a conversation with us.

Book a call now: https://calendly.com/parkermoney/infinite-banking-consultation-podcast

Listen on Apple Podcast: CLICK HERE!


Speaker 1 (00:00):
Hello, my fellow Ripples. This is Chris Miles, your cashflow expert and anti financianal advisor.

Speaker 2 (00:07):
Chris Miles was able to retire twice by the time he was 39 years old, but he’s not content to just enjoy his own financial freedom and peace of mind. Chris wants you to have your own ripple effect so you can live free today. He’s not the financial advisor you expected. He’s the anti financianal advisor you deserve. He’s jumping behind the mic right now, ready to make waves. Here’s Chris Miles.

Speaker 1 (00:37):
Well Michelle, it’s for you. Those of you that work so hard for your money and you’re now ready for your money, start working harder for you today. You want that freedom and cashflow now, not 30 or 40 years from now if you’re lucky, but you want it today so that you can live that life that you love to do what you love with those of you love. But guys, it’s not just about getting rich, it’s about living a rich life because as you are blessed financially, you now have a greater capacity to be a blessing in the lives of those around you. That is a ripple effect I’m here to create for you today. So much. Thank you for tuning in. You guys have been not only binging on these episodes, but you’ve been sharing this with other people, allowing this ripple effect to work through people’s lives because man, this is the thing that people need.

People are praying for this and I appreciate you guys making that happen. If you haven’t done so already, be sure to go to our website, money ripples.com, check out a lot of our other free resources, whether about infinite banking like we’re talking about today, or other things even about passive income that you can check out right now. Okay, so I want to talk about infinite banking today. Now, it’s so funny, I know it’s such a polarizing topic for people, which dang it, that’s why I want to do it. But I want to talk about something that infinite bankers have been known to say, or at least you’ve been led to believe that I think is a myth that’s not true. And in fact it’s very dangerous that it doesn’t truly help you but actually helps pay the insurance agent more than actually pays you. And that’s this myth that you should put all of your money into infinite banking.

Now, I know many people ask me that same question. They’ll say, man, should I just throw everything in here because I can leverage it, get that double returns where I can get money, money working in two places at once? Should I do that? And my answer is so often, no. No, you don’t have to do that. Now, I’m not saying you shouldn’t put a good amount of money through this, but it’s a very different story because the truth is, is that the reason you’re starting to see these infinite bankers, especially in the real estate space, tell you to put a large amount of money, especially upfront to start it to give it a big kickstart. The reason they say that is because they make the most money where the biggest insurance costs come in. Let me show an example of what I mean by this.

Alright, here’s an example that one of my real estate investor friends sent over to me. He said, Hey, this guy told me to throw in almost three quarters million dollars upfront and then pay about a quarter million a year thereafter. And I said, send me the numbers. Now, I knew he was talking about because this person, I personally, they’re a friend and so I don’t want to trash talk, but I also know that as an investor from my perspective, this is kind of bs. So you’ll see here, now this is a big mess. Now this is what gets people usually that’s such a big jumble mess. You don’t even know what you’re looking at. So either you do one of two things. Either one, you do nothing because you’re not sure. It doesn’t seem to make sense. I’ve had many of you guys reach out and say, this is the first time infinite banking actually made sense for me.

This is the big reason because they make it messy. Secondly as well is that if you don’t just don’t do anything because it’s messy, you might just end up trusting the person because you like the person, but you’re not realizing this might cost you hundreds of thousands if not millions. As you’ll see in my friend’s case here. In fact, I even told my friend, I said, thank you for sending this over and not pulling the trigger because if you did, you would actually cost yourself over a million dollars here in just the next few years. Let me show you what I mean. Now you’ll see here if you can see here, alright, here’s the two columns I want you to pay attention to. There’s the cumulative net premium. So you see like, alright, well anyways, it says cumulative net premium right there, seven 13,000 9 76.

Basically put it 714,000 year one, and then you’ll see at the second one from the right says net cash value. So really that’s what I’m focusing on is what’s the net cumulative premium or even the net premium just to the left of that, which shows you what they put in that year and what’s the net cash value at the end. So premium much is what do I put in pay in premium? How much is actually available in that cash savings account that I could use? So in his case, you put in about 714,000. In year one you have about 442,000 in cash. This is better than the average infinite banking policy. This is better than the typical whole life. If you put in 714,000, most of those insurance policies, you’ll have zero cash issue for it. All of it goes to fees. All of it goes to paying the insurance costs and from the insurance costs is how the agent makes their money.

They make a percentage of those insurance costs. That’s how it works, okay? So in this case, only 62% goes to cash. This is still better than a hundred 0% go cash, but still 62%. That means 38% of this is going to fees. So if he has four 42,000, that means there’s roughly about $270,000 going to fees and then that agent makes a percentage of that cut, and then of course after that they start paying roughly about, you’ll see here, like 270,000 a year throughout. There actually is a year he pays at almost four 70,000 for whatever reason. I don’t know, I think I just did it to prove a devil’s advocate point to show we’re still going to kick the crap out of these numbers, but you’ll see it has, it builds along. Now I’m showing that cumulative net premium because if you look here as we get down to year 16, you’ve paid 5 million into it, 4.967 million, you can see that Now the cash value after you’ve paid almost really about 5 million, the cash value is just over 6 million.

So okay, not bad, right? You’ve netted $1 million. Many people that criticize whole life say, oh, you just pay cost. But the truth is you have more in cash here than what you’ve paid into it even by that 16th year, not the best. And that’s what I told ’em. I said, this is good, but it’s not great and definitely not the best. Now let me show you that. Apples to apples, right? Because again, he paid 5 million or almost 5 million into it had 6 million in there in mine. You’ll see here now just that first year loan, he pays seven 14. I don’t know why it came up a few hundred bucks. I think’s he gave me a different number in the beginning anyways, pretty much it was only $800 more. But look, instead of having 442,000 in year one, he’s got 535,000, that means he’s got over $90,000 more than the other scenario.

So you’ve basically saved $90,000 in costs because it’s only 25% goes to cost. Not 38% going to cost in this case. So already day one we’ve got a lot more money, almost a hundred thousand dollars more. Now look here, year 17. Now by this point I’ve got about 5 million who’ve paid into it, but right here, right next to it is total cash value. It’s almost 7.3 million. So he’s got $1.2 million more than what he has over here where again, he paid almost 5 million there and he’s got a little under 6.1 million. So still, even if you’ve netted out, because there is a little bit difference there still, that’s roughly at least a hundred, sorry, 1 million, 150,000 give or take better. So almost 1.2 million better on ours versus theirs, and that’s just doing apples to apples. Now again, I’m showing like seven 14,000 going in 270,000 per year.

Then even the minimum, I show ’em that for a few years. This is show that it’s actually the minimum’s only 140,000. You don’t have to pay two 70 in this one actually because that base premium is about 270,000. He has to pay 270,000 every year. He’s required to pay 270,000 if he can’t pay it, and if he doesn’t have enough money in cash to be able to pay it, he loses the policy, right? We don’t want that to happen. So in this case, we did it differently where yes, he puts in a lot more money, but his minimum is only 140,000. It’s half of what it is. Now, this is, again, I was trying to show him apples to apples, but this is not what I’d recommend. Coming back to this point here, my recommendation is not to do just do this big dump in.

I said, listen, tell me about your cashflow situation. What’s really happening here? He said, yeah, I’ve got about a million dollars sitting in cash I could put in here. And of course all people, they say, well, should I just throw it all in? I said, no, don’t do that. In fact, what I’m going to recommend is maybe only do about a quarter million a year, which is less than what think I was having to do. I said, do a quarter million. You could still invest more of that money, but let’s just do a quarter million a year. Watch what happens, guys. I said, if you do a quarter million, here’s the great thing is that we’re only going to let you do up two for that for up to eight years. Now, we could design it to where he could do it longer if he chose to, we could do it that way.

I show him, I said, well, what’s the reality? Are you going to be keep dumping in this money pretty aggressively? He said, no. Probably within 10 years I might back off of my investing and just kind of take it easy in my real estate. I said, if that’s the case, well then we don’t want to keep dumping in a quarter million. I mean, maybe we could, but maybe we don’t want to. So let me show you this. I said, here’s the way he gets your best ROI. You put in 250,000. Look, from day one you’ve got almost 200,000. So already just really a little over 20% it’s coming out in cost here. That’s not bad. I said, this is really good. In fact, now his death benefit is less. Why? Because I lowered the death benefit. Because remember, insurance cost is what the agent gets paid off of.

So I try to figure out, well, for a quarter million to go in, what’s the smallest death benefit he needs to do to allow that 250,000 to go in 4.675 million? And it still grows every year, which is great, but again, 197,000, his is awesome, right? He does it for eight years, put in 2 million, he’s still got 250,000 more. And that’s assuming the dividends don’t go up, which they’re already predicted to go up in 2025 because of the higher interest rate environment right now. But still, even if they just stayed the same, they stayed at the lowest that they’ve been for a while. He still has 250,000 more than he paid. And even by the eighth year, this is already really by the third year, it’s pretty much paying for itself. There’s a net profit, a net gain from the dividends. The interest that you’re earning is paying for the insurance costs.

So when you’re putting money in, all the money’s going in that’s accessible for you. You can actually use that money versus some of these other ones. You have to wait several years before it finally gets to that point. And look at this, the minimum on that quarter million is only 49,000 a year. So even though this guy could literally pack away quarter million plus a year, he’s only required to put away, in this case, 49,000. And worst case scenario, even if he can’t pay the 49,000 he borrows from the cash value, which from day one he’s got 197,000. He could borrow 49,000 from that. Pay it right back in. And of course, like I said, depending on the year, especially if it’s after the third year, whatever he’s paying in, it is growing by more than what he pays in. So even if he had to borrow to pay that, say that quarter million dollars and say in year four, even if he doesn’t have to do the quarter million, but say he does great, he still puts the money in, the money’s still there, but he borrowed from the policy to be able to put right back in and yeah, you net gain over almost $30,000.

Anyways. So that was my point. It’s like, man, actually even after interest, he’s probably still nets about 5,000 bucks even after paying interest on that. So he’s still making more than what he’s putting in. So again, that flexibility allows to do so much more. And I think that’s important is that when you’re looking at something like this, you want flexibility, right? You want to be able to know that those numbers are that you’re safe, that you can expect the best, but prepare for the worst. You need flexibility. So even though, yes, I could have made triple the commissions by telling him, Hey, just do it this way just like that other guy showed you. Yeah, I like that too. And that’s why there’s more and more infinite bankers out there trying to teach you saying, oh, dump in money. It’s not even worth it unless you dump in at least a hundred grand.

I’ve heard people say that. That is fricking ridiculous, guys. I’ve told many of you, worst case, if you’re going to be putting in this policy, if you can save at least five or $10,000 a year, it can be worthwhile to put it in. If someone’s telling you you should have put in at least 50 or a hundred thousand a year, they’re telling you that because they just want you to make more money. And really when I say that you’re not making more money, they are. That’s the problem. This is why I’m so angry at the infinite banking space because this is the reason why our company even does it in the first place because it’s hard to trust everybody, even if they know how to do it right, will they do it right or will they focus on their own pocketbook? If you understand an abundant world, and unfortunately financial people, advisors, insurance agents don’t really believe in an abundant world.

But if you believe in abundant world, you know that if you do the right thing for people, the right things always happen for you too. Always. The crazy thing is we’ve made lots and lots of money doing this, and that’s us after we cut back our costs as low as can get ’em for any given situation. So the client gets a win, but we still get a win too. Why? Because our clients put more money in knowing that they don’t have to put more money in. They put more money in knowing that the less insurance costs. They said, well, if I’m going to have more money in here, I might as well put more. But notice that we still talk people off the ledge saying, don’t just dump in a ton of cash. Let me give you another example how this integrates with investing especially, right?

So I had somebody come to us that they had a quarter million dollars in savings. They said, Hey, I love this infinite banking concept. I get it. I love it. Let’s do it. Should I dump into quarter million of my savings in here? And I said, no, because if you do that, over $50,000 is going to go to those insurance costs in that first year. The first year is the most expensive, and that’s the way it always is. No matter how much you put in the first year is most expensive. Then it decreases a little bit in the second year, and then by the third and then the fourth year, the cost decrease significantly so it gets better. And so he said, I got 250,000. Let’s throw it in. I said, stop. Let’s not do that. I said, let’s look at your situation. What’s your real cashflow?

And the truth is, the guy could probably put away roughly about 25, 30,000 or so a year because he’s been putting away in the savings, wants to do some real estate investing. I said, instead of just dumping in 250,000, let’s instead just have you do 50,000 a year as a max and knowing that your minimum required premium is only about 11,000 a year, you’re saving over 30, but you’re only required to pay about 11. And even then we got cash in here that will save you. It can act as an emergency fund for you. So I said, instead of doing that, put 50,000 here. You still have 200,000 you can invest. Well that 200,000. Then you go and do passive investments with it making 10% a year, which is kind of typical of a lot of our investments. 10% a year on 200,000 is 20,000 a year.

So guess what? You’re already saving 30. You now have 20,000 year of passive income coming in and guess what your premium’s paid for. Do you see the genius in that, guys? I’m not saying that I’m a genius necessarily, although it’s pretty cool, but I’m not saying that’s the case. I’m saying the genius is your investments then pay for your premiums. Now of course, I know that investments aren’t always guaranteed. There’s always risk. You can always lose money, right? So that’s why you still got to be careful. You still got to budget around that. But remember, he was already putting away 30,000 a year, but he’s only required to do about 11,000 a year, but he can pay end up to 50,000 a year. So he has a range of, he can do, has flexibility, and even worse, worse case, let’s say he gets laid off, if he can’t even do the 11,000 a year borrow from the cash pay, the premium it pays for itself, especially after those first couple years.

So when you design it the right way and you make it flexible enough, it actually becomes really awesome. And people always say, well, what’s the downside here, Chris? Well, I said, well, I try to minimize the downside for one. But the downside is, again, coming back to those first two years, especially even three years, is that there are some net costs potential in those first few years. So if you pay money in, yes, you are paying for insurance costs. In fact, you pay insurance costs throughout. The nice thing is by year three or four, the insurance costs are paid for by the interest earned inside the policy. So it’s paying for itself by that point, able to grow more cash than what you’ve paid into it each year. So those first few years, it’s the trial effect. And lately, especially as 20 22, 20 23 was a big faith building period for a lot of people in real estate, especially when things got leaner because it wasn’t as fat and happy as it was in 2021, for example.

Well, many people say, Hey, should I be doing this still? I mean, I’m paying. This is costing me money. And I have to remind ’em. I said, well, saving anything looks like it costs you money, but obviously can you do something with that savings to invest? Yes, no different here. This is just a different type of savings that you can use. Instead of using the bank to do bank savings, you’re using your insurance savings, and that’s even protected by insurance reinsurance companies and things like that to protect your money too. And you earn more than 0.1% of the bank. And in most states it’s a hundred percent protected from lawsuits and creditors. It’s a big deal. That’s awesome. By the way, the guy, that’s the real estate investor, that’s the number one reason why he wanted to do it. He said, wait, in my state, they protect this money.

I said, yeah. I’m like, yeah, you can have a savings account in a bank and that will not be protected If somebody sues you and wins, they can take the money right out of your savings account. They can put a lien on your home, your very home, your residence that your family lives in, they can take that equity away from you. But in this, they cannot. Again, that’s most states. Some states of California are kind of jerks. They only protect some of the cash, but they still have some protection. And so that’s the nice thing about this, that if you design it just right, and again, you’re not just going for what the insurance agency tells you to do, don’t just throw all your money in. I believe in that right balance. There’s got to be, there’s always that happy harmony, right? Sometimes you could do too little and it doesn’t move the needle.

You do too much. It creates stress. You go right in the middle. And especially when you start to blend together, investing with how you use this, just like that person that had a quarter million sitting in savings, no, we’re not going to throw that all in here just to make a big fat commission. Definitely not. In fact, let’s drop it by a fifth of that and not to mention cut even the commission’s lower because it’s better designed in how we do it, guaranteed every time. And then from there, then you’ve got the money to still invest to help pay for that premium and even cover at least the minimum part of that premium. You see that? You see how that’s cool that in my mind, that’s a safer way to go from an investor perspective. Insurance agents, I know they won’t see that. They’ll say, round all your money through here.

Heck, even make it your own personal checking account. You’ll pay your own bills with it. Don’t do that. That’s a ripoff. That’s just trying to get them to funnel more money in there so that they get paid. Again, more commissions while you have to wait for it to build and grow before you can even use it for the way that they talk about doing. Don’t go buying cars with it. Don’t go necessarily go buy houses with it where you get no mortgage on it or something like that. Trying to avoid mortgage companies. Guess what? Mortgages about the same interest rate right now as the insurance loan. But if you get bank money, that’s money that you didn’t have before that then can be used. And then you have this money in the policy to invest as well. Remember, it wasn’t just investing that 200,000 for that guy, he’s building up cash in there as well.

So then he can also invest more from his policy, not to mention the money he was already earning in passive income. There is where you could start creating that income snowball, that avalanche where your income, your passive income, can keep growing year after year after year. So now obviously if you have questions, maybe you’ve done something like this before and you’re not sure if you have the right strategy, maybe you’re even looking at numbers. Let us throw our hat in the ring, let us show you to see if it’s good or not. If it is, I was actually just looking at a guy’s email looking for some of these comparisons and the guy just said, Hey, based on my situation, I might just stick with what I have. And we said, you know what? Great. We support you. We’ll be honest. If it’s somebody’s doing a good job, we’ll tell you.

In fact, I might even be friends with that person. But if you could do better, just like this guy here, saving himself literally into the millions after just 15, 16 years, guys, there is no excuse why you should be paying more than you deserve. There’s no excuse why you should be paying them a bunch of money, helping them go on their nice little vacations and everything else, and helping their family, putting their kids through college. When you have to suffer yourself, you deserve more. You deserve that freedom right now. And when you can use this together with your investing, it actually just throws more gasoline on the fire to help you get there faster. So again, if we can always help you, go to money ripples.com. You can go and reach out to us, contact us. There’s even more information on infinite banking there on our website.

But either way, I just want you to make sure that you are doing what’s right for you and your family because that’s what you deserve. That’s what you should have. And make sure you do it proven so it’s done the right way every single time, regardless of what the insurance agent gets paid, that you’re always getting the best deal. That’s our commitment to you. Make it a wonderful and prosperous week. We’ll see you later. You need flexibility. So even though, yes, I could have made triple the commissions by telling him, Hey, just do it this way just like that other guy showed you. Yeah, I like that too. And that’s why there’s more and more infinite bankers out there trying to teach you, saying, oh, dump in money. It’s not even worth it unless you dump in at least a hundred grand. I’ve heard people say that. That is freaking ridiculous. Guys, if you can save at least five or $10,000 a year, it can be worthwhile to put it in. If someone’s telling you you should have put in at least 50 or a hundred thousand a year, they’re telling you that because they just want you to make more money. And really, when I say that, you’re not making more money, they are.

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