A fine example of Austrian School Economics in action, Infinite Banking is a system that was invented by Nelson Nash in the 1980s. The system is also commonly referred to as the Bank on Yourself method. At its core, Infinite Banking allows you to be your own banker. You are in control of your money, rather than being at the mercy of banks and other financial institutions. With Infinite Banking, you use a specially designed whole life insurance policy as a savings and investment account. The cash value of the policy grows tax-deferred, and you can access it through policy loans. This means that you are essentially earning interest on your own money, rather than paying interest to a bank. 

IB uses whole-life insurance rather than term insurance because whole life has a number of advantages. With whole life insurance, the cash value grows steadily over time. And, if you die while the policy is in force, your beneficiaries will receive a death benefit. Term insurance, on the other hand, does not build up cash value, and it expires when you reach a certain age. You can read more about infinite banking at https://yourfinancetruth.com/. 

How To Set Up Infinite Banking

If the concept of Infinite Banking sounds intriguing, you may be wondering how to set up a system like this for yourself. Fortunately, it’s not as difficult as it may seem at first.

1. Start young

Like most things in life, the sooner you start, the better. This is especially true when it comes to Infinite Banking. The earlier you start, the longer your money has to grow, and the more time you have to take advantage of compound interest.

2. Choose a reputable insurer

Not all insurance companies are created equal. Some are more financially stable than others, and some have better customer service. When you’re shopping for an insurer, be sure to do your homework. Check out reviews online, and talk to friends and family who may have experience with different insurers. IB is a lifelong process, so you want to be sure you’re working with a company you can trust.

3. Choose a non-direct recognition policy

When you’re looking at whole-life insurance policies, you may come across something called “direct recognition.” This type of policy is generally not a good choice for Infinite Banking. With direct recognition, the insurer may pay dividends on the amount available on the account. On the other hand, with non-direct recognition, the insurer pays dividends on the full cash value regardless of whether you have borrowed from the policy or not. This type of policy is generally a better choice for Infinite Banking.

4. Select a policy With a cash value rider 

To avoid losing the cash value you’ve built over a lifetime of saving, choose a policy with a cash value rider. This rider will keep the cash value in the policy even if you pass away. In most cases, the cash value will go to your beneficiaries.

5. Add a paid-up addition rider

It can take decades to build up a significant cash value in your Infinite Banking policy. But what if you could start with a larger cash value from the outset? That’s where the paid-up addition rider comes in. This rider allows you to make additional contributions to the policy, above and beyond the regular premiums.

6. Go ahead and borrow

After you have your Infinite Banking policy in place, don’t be afraid to borrow against the cash value. Remember, you’re essentially borrowing from yourself, so there’s no need to worry about high-interest rates or repayment terms. Just be sure to keep up with your regular premium payments, so that you don’t jeopardize the death benefit.

Advantages of infinite banking

1. Builds Wealth Quickly- With Infinite Banking, you can take advantage of compound interest to build wealth quickly. The cash value of your policy grows tax-deferred, so you can reinvest the money and let your money work for you.

2. As long as you keep up with your regular premium payments, the cash value of your policy will continue to grow, even if you have borrowed from it in the past. This is one of the key advantages of Infinite Banking.

3. You’re in control-With Infinite Banking, you’re in control of your money. You can decide when and how to use the cash value, without having to answer to a bank or other lender.

4. Flexibility-Another advantage of Infinite Banking is that it’s flexible. You can use the cash value for any purpose, whether it’s investing in real estate, starting a business, or funding your child’s education.


Being your own banker is a sound financial strategy that can help you grow your wealth quickly and efficiently. If you’re looking for a way to take control of your finances, and build your wealth on your own terms, Infinite Banking may be right for you.