Infinite Banking is a personal cash flow strategy using multiple cash value whole life insurance policies to “capture” your income. The Infinite Banking Concept was invented and developed by R. Nelson Nash over 40 years ago in the early 1980s. His personal experience with both traditional financing and owning cash value whole life insurance gave him the idea to leverage both to get out of debt from banks quickly.
My clients use Infinite Banking for real estate investing and financing their lifestyle during retirement. Infinite Banking can easily create passive income streams when utilized to the fullest extent of the policies benefits. The key is to maximize ALL the benefits within a cash value whole life insurance policy.
The biggest benefit of a cash value whole life insurance policy is the ability to use the cash value while the policy is generating dividends and interest at the same time to create passive income streams.
The best example of this is to buy a cash flow asset like a rental property by borrowing against a portion or all of your cash value in one of your policies. While the rental property is generating cash flow, the policy is still generating dividends and interest. So in theory you have created double duty dollars with leveraged debt that you control. And control of our money is what we all want.
Meanwhile, the rental property is paying back the loan to the cash value life insurance policy AND increasing in market value. This is perfect example of a passive income stream.