The Infinite Banking Concept Episode 4 – Infinite Banking is a scam.

In this installment of our weekly blogs, we will be going over why Infinite Banking is a scam!

Well, I’ll be going over why people call it a scam and some legitimate views that people have towards the Infinite Banking Concept.

You can make more money doing something else

They usually compare it to an equity portfolio or an S&P ETF that has an average return over time of 9%

I’ll tell you right now – yes of course you can make more money investing in an equity ETF than you can if you put it inside a conservative insurance policy.

It Costs Too Much – you can buy term insurance cheaper

One of the main criticisms of infinite banking is the high costs associated with whole-life insurance policies.

And if you haven’t watched the previous episodes in this series, then you don’t know that the Infinite Banking Concept is using an overfunded participating whole life insurance policy and taking a loan against the cash value of the policy to use for investments.

It’s true, it’s not cheap. The baseline in my eyes is you should be able to save $1,000 a month for ten years without having to worry about needing it.

We have clients who invest 100, 200, even 500 thousand dollars a year, so yes it does have a “high” cost, but it’s built for people wanting to keep safely continue to grow their existing wealth and be able to easily pass it on to future generations.

The concept is not for everyone, and if it’s not for you right now, that doesn’t mean it won’t ever be for you.

The Complexity

I’ve read articles online and heard people say that they find it too complex, here’s a direct quote from an article:

“Infinite banking can be a complex financial strategy that requires careful planning and understanding of the policy terms. It may not be suitable for individuals who prefer a more straightforward approach to managing their finances.”

Now this is sort of – it is a little bit complex, but it’s really quite simple

It even gives you an answer here, that if you don’t quite understand it then it might not be for you, but that’s why we make these videos.

These videos are here to be your library of Infinite Banking knowledge; we have many videos about the benefits of Infinite Banking and the most frequently asked questions, which we have linked below.

Pushy Salespeople

An extremely common reason that people view Infinite Banking as a scam is that a lot of people selling it, especially in the U.S., are quite pushy and try to sell you, your mother, and everyone you know that it’s a pot of gold at the end of a rainbow.

While, as we mentioned earlier, the Infinite Banking Concept is not for everyone.

We are not here to sell everyone the Infinite Banking Concept, this concept can be “expensive”, there is some level of opportunity cost while you wait to take your first loans, it is more complex than say saving in your TFSA, which if you are doing this strategy, you probably already have a strong TFSA and a strong RRSP.

The Infinite Banking Concept should not be your first investment, it’s something that anyone can do but not everyone should.

Contact & More Info

If this is something you want to set up for yourself, your family or your business please reach out. We’ve been doing this all day every day for the last 12 years and have 100s of clients all across Canada.  I’m happy to chat and see if we can be a good fit to work with you. Fill out the table below and we will get back to you in 24 hours on business days.

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