Money is the master of our lives, or at least, that’s what it feels like when you’re looking into an abyss of debt, loans, and financial responsibilities. When it comes to getting and staying in control of our financial situations, it might seem overwhelming when you have no idea where to start or even what to look for in creating a better, more rewarding strategy of using, saving, and creating money.
In this blog, we’ll talk about how you’re using your money, how banks use it to make more (for themselves), and how you can replicate their model of money flow to make sure you’re generating wealth for as long as you live. We’ll talk about the infinite banking concept, how it works, and how you can apply it in your own, everyday transactions and money strategies.
Ready to get started? Let’s dive in.
What Does Becoming Financially Free Require?
It Takes Less Than You Might Think
When we think of what it means to be or start becoming financially free, we often imagine luxurious cars, lavish holidays, and an endless flow of cold, hard cash. However, financial freedom looks different depending on who you ask.
For some, it means having the security to enjoy their hobbies and passions without sacrificing their quality of life. For others, freedom simply means learning how to control your finances before they control you through impulsive spending and crushing debt.
The one common fact about financial freedom, no matter who you ask, is that it’s possible to unlock it – and the infinite banking concept is the key.
First Things First…
You Need to Understand It’s Not About What You Buy or Don’t Buy
When you think of saving, you might think of the things that you buy. Instead, you should be thinking of how you’re paying for the things that you buy. In most cases, you’re either paying or losing interest.
Take financing a business for example. When you finance a business, you’ll incur interest that’s paid to the financial institution or lender you’re working with. When you pay in cash, you’ll never see the money that you don’t earn. You’ll essentially keep the interest.
With that in mind, it’s important to understand that the secret to how to control your finances is to control your cash flow. You need to find the most effective, efficient way to earn compound interest on a regular, continuous basis, without halting the purchases that you want or need to make.
Now that you have a basic overview of what you need to know about interest and payments, let’s talk about how banks make money.
How Do Banks Make Money?
They Do It by Using Yours
Becoming financially free means thinking like a bank. No, not loaning out money and hoping you’ll get paid back. We mean keeping your money flowing every single day. To understand the infinite banking concept, you need to understand how a bank makes money in the first place.
The very first step to making money as a bank is starting your bank. This is done by applying for a charter and finding people who want to start depositing money. A new bank might charge higher interest than their competitors at first. Then, this new bank needs to find people who need money.
Starting The Flow and Keeping It Going Forever
Using Depositors and Borrowers in A Perfect Balance
Once they’ve identified a network of depositors and borrowers, the real work begins. They offer sky-high interest rates on savings accounts to tempt you and others like you to start saving your money with them. However, they won’t be losing out by offering you these “high” interest rates. Once they have your money, they’ll start lending it to qualified borrowers.
These borrowers will then be responsible for paying their money back at an interest rate much higher than what you’re getting, which means that Mr. Bank can pay you your interest and pocket the difference. Easy, right?
As you can see, when you’re a bank, “your” money never stays in one place for very long. It’s lent out and stays flowing so that it can grow forever.
How To Apply the Infinite Banking Concept in Your Own Life
Without Spending Years Learning How to Do It
It might seem strange to compare making money as a bank to becoming financially free as a parent, working professional, and/or recent graduate. While you won’t be able to lend out billions of dollars and reap the reward of high interest repayments, you can apply the principle of keeping your money flowing with the right life insurance, savings vehicles, and processes. By owning this banking process, you’ll be able to learn not only how to control your finances, but also how to use them to keep your wealth growing your entire life.
What Does Tier 1 Capital Do?
We Help People Just Like You
Tier 1 Capital provides our valued clients with the permanent life insurance they need to accumulate cash indefinitely. We connect you to a savings vehicle or pool of cash that you own and control.
We provide our clients with a range of financial strategies that cut down the risk and ramp up the accessibility of their money while keeping them in complete control. Our mission is to empower our clients with the strategies and insight they need to take conscious action regarding their finances and their overall financial future. We are committed to keeping you informed, educated, and up-to-date with the best financial practices and services in the industry.
We have worked with families and small business owners of all walks of life, and now, we want to work with you. Reach out to our team now here at Tier 1 Capital and book a free strategy call today if you’d like to learn more. We’ll walk you through everything you need to know as part of a complimentary strategy session with one of our certified and professional team members.