The term ‘infinite banking’ is quite popular now. Defined broadly, it is a system of wealth-saving-and building by borrowing against a whole life insurance policy. It is an endless banking system where a person becomes their own banker without charging fees or interest. To make this work, an individual needs to be able to calculate liquidity and cash flow as well as understand fluctuations in the stock market. An infinite banking concept calculator can help a person assess a policy’s cash value and determine equity.
How Does It Work?
Infinite Banking essentially works on borrowing money against oneself after buying a whole life insurance policy. On a participating whole life insurance policy, an individual participates in (receives dividends from) the profits of their life insurance company. The dividends are a wealth-building vehicle that increases cash value through the compounding effect.
A person allows the insurance company to hold the policy as collateral and borrow money from the bank account. Therefore, the person borrows money from himself, yet the money continues to compound. The bank account holds the premium payments, the dividends paid on the whole life insurance policy, and the guaranteed interest rate. A whole life insurance policy (unlike term life insurance) is not just a premium refund for the family after the policyholder dies. It is also designed for the policyholder to use in numerous ways, while alive.
Things to Check before Buying
A person should verify a few things before finalizing an infinite banking concept calculator.
- Trial Period: Most people are unaware of Infinite Banking, and many are just now stepping into it. A trial period before buying an infinite banking calculator will help the buyer understand its functioning. A test drive is also beneficial before going for the full version of the software and checking whether it runs properly or not.
- System Requirements: Everyone has a different computer system at home or work. Their calculator should be compatible with their system. Therefore, it is essential to check compatibility before buying one.
- Type: There are three banking calculators currently available – borrowing, cash flow, and automobile purchase. It is essential to understand one’s needs and buy accordingly. Some people also prefer to use multiple machines to increase their returns in the long run.
Advantages of This Calculator
Broadcast Strategy
A company often requires significant working capital to enhance its operations and increase its investment returns. Most companies aim to diversify their investments to find new endeavors along with investing in new technology and equipment. An infinite banking calculator can quickly analyze and identify solutions to increase cash flow. It can also explore a person’s financial planning strategy to increase returns.
Analyze Returns on Investment
An infinite banking concept calculator is an essential tool for an investor. Before investing, an individual needs to know the returns they will make. The software displays the yearly cash flow after calculating the market’s fluctuations and inflation. This machine is precise and helps a person make wise choices.
Analyzes the Market
It also contains a dedicated tool for analyzing the stock market. The tool covers the various market indexes along with payouts obtained from each index. The information is updated yearly and can also compare interest rates, taxes, and stock prices. It is constructive for investors to analyze the long-term value of their investments.
Estimate a Strategy
It can help an investor estimate the opportunity cost and actual cost of money in the long run with the IBC technique. Even if an investor is applying for a loan, the calculator can optimize their cash flow efficiently.
Final Thoughts
Infinite bankers are always looking to improve their financial strategies for better returns. An infinite banking concept calculator can help investors gain a better insight into a particular investment and get an idea of various opportunities ahead.
