What is the “Banking Process”?

“Banking is the Most Important business in the world”!

“Without it, all business comes to a halt”! -------R. Nelson Nash, author of The Infinite Banking Concept, Becoming Your Own Banker


*IBC/Banking Principle*: “Money must flow” for the banking process to work.

Whenever a business transaction takes place, money must flow from one party to another in a relatively short time. That flow of money must come from a supply source, a reservoir, a pool of money. That is the “essence” of what the banking business is all about: some “one” or some “organization” has control of a pool of money that can and (must flow), at a cost, to meet some need.  The IBC allows you to have Total Control of the banking function, as it relates to your needs and wants.


First, a Commercial Bank must have funds, (a pool of money), from which to make loans. This is required or you will not be in the banking business.  To “Become Your Own Banker”, you too must have a pool of funds or create a pool by saving money. This is usually done by setting up a systematic deposit from your cash flow, (income) and must be continued until sufficient amounts of money have been accumulated. 


Second, a Commercial Bank must make loans and charge interest to become profitable. When a Commercial Bank lends money; the money flows from the Bank to the borrower. The Bank then charges interest to the borrower, and collects interest plus principle, usually on a pre-set regular schedule…the money now flows back to the Bank…this is repeated over and over many times…this is how the Bank makes money.

You would become your own borrower.


The essence of what The Infinite Banking Concept is all about is simply this----you recouping the interest that you would normally pay to some banking institution, (by Becoming Your Own Banker), and then lending it to others and charging them interest…so that your Bank makes what the banking institution was making.  The IBC is simply teaching you to handle your money the same way Commercial Banks handle their money. Making loans, and collecting interest…keeping the money flowing.


When you “Become Your Own Banker”, you will act in these distinct roles:


1.      You will become the “Saver” to create a pool of money for your Bank

2.      You will become the “Banker” to control the process of making loans and collecting interest for your Bank

3.      You will become the “Borrower” to access money, (take loans),to pay for the things you, your family or business will need and want

4.      You will become the “Stockholder”/“Shareholder” of your Bank…you will get 100% of the profits/dividends


Remember, Money must Flow, even in a banking system that you will own and control.  When you practice The IBC, you will have Total Control of the Banking Function and will you will enjoy less “stress” in your financial position and more enjoyment for your family.


Stay tuned for the newest installment of Joe’s Teaching Moments…