What You Need to Get Started with IBC
The only way to mess it up is the opposite of what you think
Remember when we were told the "responsible" way to handle money was putting it all in a 401(k) and hoping for the best?
Today I want to talk about a different approach - The Infinite Banking Concept (IBC). But more specifically, I want to address the biggest obstacle I see stopping people our age from getting started: the pursuit of perfection.
Here's the truth: The biggest mistake people make with IBC isn't choosing the wrong insurance company or getting their policy designed incorrectly - it's waiting too long trying to make everything perfect.
Why This Matters to Gen X & Y
We're in our prime earning years, but we're also old enough to have lived through multiple market crashes. We know the traditional financial playbook isn't all it's cracked up to be. But here's what's wild - the alternative that's been hiding in plain sight is actually really hard to mess up.
Think About It This Way Remember when you got your first apartment? You didn't wait until you could afford your dream home with perfect furniture. You started where you could and upgraded over time.
IBC works the same way. There is a "capitalization period" where you're building your foundation. But unlike that first apartment's IKEA furniture, your IBC policy is guaranteed to get better every single year.
The Only Way to Actually Mess Up
Here's the ironic part - the only way to truly mess up a whole life policy is by doing what all the TikTokers tell everyone to do, which is overemphasizing and overengineering a policy for maximum cash value in year 1. Across the industry, the only design that could cause a catastrophic problem with whole life is super high early cash value.
All things being equal, we of course want as much cash value as possible, as early as possible. But when it comes to all types of insurance, everything is a tradeoff. And high early cash value comes with significant tradeoffs that are rarely disclosed to clients because high early cash value is, frankly, easier to sell.
Because to get really high early cash value, non-guaranteed policy elements (other than the dividend) may be used. These are pretty much the only thing that can cause a policy to completely blow up without you doing anything wrong. And you likely won’t even know about it until it’s too late.
What You Really Need to Know:
IBC is about creating your own banking system, not winning a rate-of-return contest
Your policy will have immediate cash value, but it will be less than what you paid in premium for a few years.
Every year it gets better - more cash value, more flexibility, more options
You're in control - not your agent and not your cousin who thinks whole life is a “terrible investment.”
Quick Reality Check
Typical financial advice tells us to lock our money away for decades
Then cross our fingers hoping the market doesn't crash when we need it
Meanwhile, we're financing everything through banks and giving away our banking profit
Infinite Banking with whole life insurance is the opposite. The outcome is known. You maintain control, build guaranteed wealth, and create options for yourself rather than restrictions.
The Simple Truth
Getting started with IBC doesn't require perfect timing or a perfect strategy. It requires understanding that you're building your own source of financing that will serve you for life. The sooner you begin, the sooner you can start creating what Nelson Nash calls a "financial tailwind" - making everything in your financial life more efficient and effective.
Learn more at StackedLife.com.
Listen to this full podcast episode and subscribe at Stackedlifepodcast.com/4.
In the news - interest rates
Higher and lower interest rates and what it means for Infinite Banking.
Interest rates are everywhere in the news lately. When I talk with clients about starting their IBC journey, one of their first questions is often "Should I wait until rates come down?" Let me explain why this thinking misses the bigger picture.
Think about interest rates like a tide that lifts (or lowers) all boats. When rates for borrowing are higher, rates for saving are typically higher too. While it's true that policy loan rates might increase during periods like this, that's not necessarily a bad thing for your banking system. In fact, this environment creates some interesting opportunities - similar to when Nelson Nash first wrote "Becoming Your Own Banker."
Here's something most people don't realize: rising rates can actually benefit life insurance companies, and by extension, policy owners like you. These companies invest premiums in long-term debt instruments, earning higher yields when rates rise. This often leads to increased dividend payments over time. While dividends don't jump immediately with interest rates (they tend to lag prevailing rates), this slower movement actually helps create stability in your IBC “banking system.”
Whole life rates tend to trail prevailing rates, so there’s always a benefit.
Low interest rate environments
During low-interest rate environments, bank loan rates may be lower than policy loan rates, but policy growth rates will be significantly higher than a typical savings account, CD, or even a bond.
Rising interest rate environments
When interest rates are rising, savings accounts and CD’s become more competitive, but policy loan rates tend to be better than a typical bank loan.
But here's what really matters: IBC isn't about chasing the best interest rates - it's about controlling your banking function. Your whole life policy gives you guaranteed growth, tax advantages, and flexible access to your capital no matter what rates are doing. Instead of being forced to dance to the market's tune, you get to make strategic decisions based on opportunities you see.
Just look at what happens in the traditional financial world when rates change: people rush to refinance mortgages when rates drop or scramble to lock in CD rates when they rise. It's reactive, not strategic. With IBC, you're building your own banking system that works for you regardless of what's happening with interest rates.
The banking function will always be essential to your financial life - that's not changing anytime soon. By controlling this function through IBC, you're positioning yourself to benefit in any economic climate. Whether rates are high or low, you maintain access to capital through policy loans, which you can use to take advantage of opportunities or navigate economic challenges.
Think of IBC like owning your own bank - you wouldn't close your bank just because interest rates changed, would you? Instead, you adapt your strategy while maintaining the core function of your banking system.
I’m John Perrings, an authorized Infinite Banking practitioner and founder of StackedLife, where we implement full-stack financial strategies for our clients.
I’ve helped hundreds of my clients and educated thousands more via my top-rated podcast, reaching over 60,000 unique listeners, along with my articles and courses at StackedLife.com.
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P.S. — Here’s a $14 million dollar conversation that anyone can benefit from and has nothing to do with investment returns.