Beating the Bank

The modern banking industry had evolved over a period of many decades. Despite its humble beginnings, banks are now the prime source of lending money and keeping our savings in check. This industry has been around for quite some time now and an average family can replicate its model to preserve, create and lend wealth.
The entire population has been raised to be at the receiving end. We have never been shown the perspective and financial gains of the lender’s side. Most of the people have no idea what secrets are held by the banks and that is the reason why they have survived for generations.

Interest Volume and Velocity

Gaining more interest volume on loans is more important for the banks these days. Interest rates are good but if a bank manages to increase the amount of loans they give out, they end up gaining more profit because of the sheer volume. Consider this example, if you take out a loan at 4%, and your principal is $1000, around $900 of this principal will be the interest you get and the $100 will go towards the pay down. Banks are not interested in the loan rate; rather they are interested in the 90% interest volume loan.
The other way banks make money is through velocity. The velocity means to the number of times they can make deposits and loan them out. This helps them create another payment stream to the bank. Now, take a single loan transaction carried by a bank and make it go wider and wider, hence increasing the volume and earning huge sums of money to the bank
One way of beating the bank is that you can make your own loans and create payments to yourself. You can end up financing your own car instead of getting whacked at interest and depreciation.

Bank and Life Insurance

One can simply not be a bank and have no place to pool their funds. As most banks do, you need to place your money with the high cash value whole life insurance policy. Once these policies are funded, a lot of tax free money is generated and this money can be used as velocity by the bank.
While setting up a family bank, you need to find a high cash value policy. You must make sure that your carrier has small amounts of permanent insurance to be bought with your paid dividends. Make sure the carrier will credit you your growth and dividends on the money you borrow out. For example, you fund a policy with $40,000 and borrow out $30,000 from the cash value that carrier will reduce the payout to 4.4 percent.
On the other hand, the downside of pooling funds in insurance is its cost. In order to beat the insurance cost you need to maintain a strong funding policy. This will help you owe more dividends. This is called self-completing.

Stashing of assets:

With your own family bank, you can now recapture depreciation on big ticket items. You will be able to borrow more money regardless of credit scores or income status. All the payments bank used to get from your side are now yours as you choose to be your own bank. Redirecting all these payments to insurance policy can now serve as the asset pool as well as embark you on your way to tax free wealth reserves.
It is crucial to look at banks and see how they stash their wealth in these insurance policies. These policies protect wealth and are the bank bone of this industry.