Problems with Infinite Banking Concept

One of the problems that Nelson Nash mentions is that people try to do too much financing too quickly.

That's a problem.

And the problem is you haven't capitalized your system enough before you're trying to use it to finance things.

purchases, investments, or whatever it may be.

And a good example of this is somebody looking at their mortgage.

When they start running the numbers and realizing how much interest they're going to pay over 30 years.

You have a $300,000 mortgage at 5% interest, which is a good rate nowadays.

And you have that amortized over 30 years, you could end up paying half of all of your payments in interest.

You'll end up paying about double for the house by the time you're done paying it off to the bank.

That is significant.

That's a big volume of interest.

People look at that and say, $300,000 of interest? I need some of that back in my control.

I should start by recovering the interest I'm paying on my house.

So they might take a policy line, pay off a big chunk of a mortgage.

and think that they will then recover that into their banking system.

Why is that a problem for most people? Can you give us an illustration of

how that becomes problematic? Let's say you're just starting infinite banking, which most people in this situation who are thinking that I should finance my mortgage are just starting out.

Okay, sure.

So they fund, they put money into a life insurance policy, they borrow everything out to go make that big payment on their mortgage.

Okay.

So now they're paying interest on the policy loan, and they're going to be paying interest on that policy loan for many years, about 30 years,

if it's going to be similar to the

payoff schedule for their house.

If it's a large enough chunk of mortgage, then they need to amortize that over that long of a period of time to make the payment affordable and comfortable.

Now, you could do that.