Book Review: Become Your Own Banker by Nelson Nash
This post may contain affiliate links, which means that if you click on a link and make a purchase, I may earn a small commission at no additional cost to you.
Become Your Own Banker by Nelson Nash is more than just a book; it's a mindset shift. This classic on infinite banking has had a huge impact on me personally—so much that I felt compelled to become a coach to share these life-changing principles with others. Today, my family and I are fully committed to the process, and we’ve set up not one, but four family banking policies. We’re pretty serious about using this strategy ourselves!
A New Way to Think About Money
In Become Your Own Banker, Nash introduces readers to the world of infinite banking, a concept that challenges traditional views on money and personal finance. Rather than relying on banks or lenders for loans, Nash shows how to create your own private banking system using whole life insurance policies. It's all about taking back control over your finances and building a source of wealth that’s accessible on your terms.
Why This Book Stands Out
What I love most about this book is how Nash explains complex ideas in a way that's easy to understand. Become Your Own Banker covers the principles and the practical steps of infinite banking, making it ideal for anyone who wants to change their financial game. From entrepreneurs to families looking to secure generational wealth, this approach works for people in all walks of life. The book walks through the mindset shifts needed to implement the strategy, as well as the detailed mechanics that make it work. It is not just about the product, it’s about a process.
Here's an example of how infinite banking can work in a real-life situation:
Let’s use an equipment finance example like one of the examples in the book. If you do not own the book, I always recommend the hard copy before picking up the audiobook because some of the case studies and spreadsheets are just that helpful when trying to understand the true nature of these policies for the first time. It is truly impressive how the momentum of a well designed, dividend paying policy from a mutual company can create so much financial tailwind over time; helping you achieve goals and milestones so much faster. The visuals definitely help with that.
So, say you need $10,000 for a power washer for your business. Instead of taking out a traditional loan and paying interest to the bank, you can borrow from your own whole life insurance policy. By doing this, you’re effectively becoming your own lender. Here’s how it plays out:
Borrow from Your Policy: You take a $10,000 loan from the cash value in your whole life policy. The policy remains intact and continues to grow as if you hadn’t borrowed the money.
Repay with Interest: Just as you’d pay back a bank, you set up a repayment plan for yourself with interest. Each payment goes directly back into your policy, replenishing the cash value and furthering your financial growth. This part sometimes gets people confused so I will break it down a bit further. The insurance carrier will charge interest on policy loans, however its usually a lower fixed rate between 4% and 5.5%. That portion must be paid to the carrier at some point. However I teach my clients to be generous with your interest payment, because any interest paid into the policy above what the carrier charges will be accepted in the form of either base premium or PUA premium depending on your mode of payment. Referring back to our example, the insurance carrier will charge 5% for that $10,000 dollar loan which comes out to $500 over the course of a year. If you are charging yourself 8.5%, that would be a total of $850. $850 - $500 = $350 of extra premium you can force into your policy which has the power to increase the death benefit, increase the available cash value for loan, and decrease the loan amount, all while super charging your ability to earn tax free interest and dividends within your policy. (The carrier charges interest on a decreasing principle balance, therefore the realized interest will be slightly less than the posted rate. However, I will stay with simple math for the example)
Keep the Interest: The big difference? Instead of paying interest to a bank, you’re paying it to yourself and your “business partner” which is the insurance company. That interest stays within your financial ecosystem, increasing the wealth in your policy and growing your cash value. Every dollar that passes through your policy will earn for you and your family every day until you die and even longer depending on how your estate is organized. Wealth is not about how much you make, it is about how much you can keep. The average person will surrender approximately 35% of their lifetime income in fees, charges, or interest expenses of some kind. What if you kept that money working for you instead? Your policy can help plug the holes of inefficiency in your finances.
Repeat as Needed: Over time, as your policy’s cash value grows, you can use it for other needs. Again the '“what” is not important, it is the “how” of the process that makes all the difference. You can apply the process to jut about anything such as cars, investments, education, vacations, or emergencies all while retaining control and flexibility with your money.
Why I Became a Coach
Reading Nash’s work was a turning point for me, inspiring me to become a financial coach and help others create their own banking policies. To learn more about my journey and the passion behind what I do, check out my story on my About page. When I tell clients that I live what I teach, I mean it—our family has multiple policies in place, which is both a personal commitment and a testimony to the power of this strategy.
Is Become Your Own Banker Right for You?
If you’re ready to start thinking differently about money and want to take the first steps toward financial independence, I highly recommend giving Become Your Own Banker a read. Whether you’re looking to eliminate debt, build wealth, or pass on a legacy, this book has something for you. And if you have questions about setting up your own infinite banking policy, I'm here to help.
Ready to take control of your finances? Let’s get started on building your personal bank and changing your financial future.
Click here to purchase "Become Your Own Banker" by Nelson Nash on Amazon and start your journey toward financial independence today.
