One of the best examples I use to explain the power of the Infinite Banking Concept (IBC) to my audiences is this:
Would you rather have a million dollars OR would you rather have the sum of a penny doubled every single day for 30 days? A million bucks sure sounds pretty good, doesn’t it. At first, you may want to go with that option, but hear me out first.
Let’s do the math:
Take one penny. Double every day for 30 days. At the end of those 30 days, how much money would you have? The answer is: over 5 million dollars!
So, my question to you is, what will you have in 60 days? What about 6 months? I ask so you can
2% Fee
But let’s throw a wrench in your plans and tack on a 2% fee. You may think, “Oh, 2% isn’t bad.” But if you do the math, that 2% fee costs you over $2 million in the course of 30 days.
Many investments you make or qualified plans you have contain fees like this, with the same dire consequences for your money so it’s important for you to understand the true cost of these fees.
Withdrawals
Let’s take a look at another financial obstacle most people face every day, with little awareness that it actually is a financial obstacle–withdrawals. Thinking quite realistically, let’s say you need to pull out some of that “penny money” before day 30. So on day 15 you withdraw $100. Then, you make another $100 withdrawal on day 25. That’s only $200, no big deal, right? Well, after doing the math, you’ll discover that withdrawing that $200 actually costs you over $3 million.
That’s right, your initial estimate of $5 million was reduced by over $3 million simply by taking out $200 over the course of 30 days. This is what we call interrupted compound interest, and most people don’t even know how much money it’s costing them.
15% Tax
The third silent financial killer is taxes. Now, let’s say your “penny money” was taxed at 15% over the course of that 30-day period. You’ll see by the end of those 30 days you have only paid $182,000 in taxes BUT because that money wasn’t there to grow by doubling, that tax actually caused a loss of over $4.8 million, leaving you with only $559,000.
These fees, withdrawals, and taxes are known to so many to be “no big deal,” especially if they seem relatively “low.” But their cost is far too high, many people just don’t ever do the math to discover the true opportunity cost of interrupting their compounding interest.
Yet, of all the systems we use for our finances, uninterrupted compound interest is the least used. But it is the most powerful because it allows your money to grow uninterrupted. This is the true way to grow wealth.
And this uninterrupted compound interest is what is used with the Infinite Banking Concept. But the best part about using this uninterrupted compound interest is that you still can use your money. It’s just structured in a way that allows your money to stay in your policy, without being interrupted. This makes you more money.
