The Smart Way To Buy Cars (Bank on Yourself) (Infinite Banking)

Summary

The video script advocates a smarter approach to purchasing cars and preparing for retirement, challenging traditional banking advice. It suggests using a cash value life insurance plan to finance major purchases, thereby avoiding bank interest and taxes while leveraging compound interest. The example given illustrates how instead of losing money on a car's depreciation, one can actually gain by using their own funds, ultimately increasing financial control and retirement savings.

Takeaways

• 🚗 The speaker proposes a smarter way to purchase cars that challenges traditional banking advice on wealth growth and major purchases.
• 💼 The concept is based on using a cash value life insurance plan to finance a car for a client's son, with the aim of financial empowerment.
• 📊 The average American spends more on cars than they save for retirement, indicating a need for a more strategic approach to car purchases.
• 💡 The idea is to use a properly structured cash value life insurance plan for guaranteed no-loss, tax avoidance, and uninterrupted compound interest growth.
• 🔢 The example given is a $30,000 car financed at 4.99% interest over 7 years, resulting in a total cost of $35,616 when paid in cash or through a bank loan.
• 📉 The depreciation of the car is highlighted, with the car being worth only $10,000 after 5 years, leading to a loss of $25,616.
• 🏦 The traditional method of financing through a bank is criticized for being expensive and for not allowing the use of one's own money.
• 💰 The alternative is to 'be your own bank' by borrowing from the cash value life insurance plan, keeping the money within one's financial control.
• 📈 The speaker emphasizes the ability to earn interest on the same money in two places with a properly built plan.
• 🔄 At the end of the 7-year period, instead of losing money, one can have access to $45,616, including the car's resale value.
• 📚 The speaker's book, 'Taming Wall Street,' covers this strategy in detail and offers mentorship for implementing it in one's financial life.

Q & A

What is the main argument presented in the video script against traditional bank loans for purchasing cars?

The main argument is that traditional bank loans for purchasing cars result in significant interest payments and loss of money due to depreciation, ultimately leading to a net loss rather than building wealth.

What alternative method for purchasing cars is suggested in the script?

The script suggests using a properly structured cash value life insurance plan as an alternative method for purchasing cars, which allows individuals to use their own money and potentially avoid the losses associated with bank loans and cash purchases.

Why is buying cars with cash considered a 'terrible way' according to the script?

Buying cars with cash is considered a 'terrible way' because it involves spending a large amount of money upfront without the potential for any return or investment growth, and it does not leverage any financial instruments for potential benefits.

What are the benefits of using a cash value life insurance plan for purchasing a car as mentioned in the script?

The benefits include never losing any money on the investment, legally avoiding taxes, and the ability to grow money every year without interrupting the compounding interest calculation.

How does the script define the 'smart way' of purchasing a car?

The 'smart way' of purchasing a car, as defined in the script, involves borrowing from a cash value life insurance plan, making payments over time, and ultimately having access to the original amount plus any gains, while also owning a depreciated but still valuable vehicle.

What is the potential downside of trading in cars with car dealers when one is upside down in their loan?

The potential downside is that being upside down in a loan means owing more on the car than it is worth, which negatively impacts one's financial situation and compounds against them, leading to further losses.

What is the significance of the number '84 months' mentioned in the script?

The number '84 months' refers to the seven-year time frame over which the car loan payments are made, highlighting the long-term financial commitment involved in purchasing a car through traditional means.

How does the script suggest one can recoup the money lost on a car purchase?

The script suggests recouping the money by using the cash value life insurance plan to borrow against the money, allowing the original investment to continue earning interest as if it were never borrowed, and by selling the depreciated car to contribute towards the next purchase.

What is the potential financial outcome after seven years if one follows the script's advice on purchasing a car?

Following the script's advice, after seven years, one could potentially have access to the original car purchase amount plus any gains, plus the value of the car sold, resulting in a significantly better financial outcome than traditional methods.

What is the author's goal in presenting this alternative method for purchasing cars?

The author's goal is to educate viewers on a smarter way to manage finances, particularly for major purchases like cars, with the aim of strengthening their financial situation and preparing for retirement more effectively.

How does the script address the issue of car depreciation?

The script acknowledges that car depreciation is inevitable but suggests that by using a cash value life insurance plan, one can mitigate the financial impact of depreciation by leveraging their own money rather than losing it to bank interest.

Outlines

00:00

🚗 Smarter Car Purchasing with Cash Value Life Insurance

The speaker introduces a strategy for purchasing cars and preparing for retirement that challenges traditional banking advice. They discuss using a cash value life insurance plan to finance a car purchase for a doctor's client, emphasizing the benefits of using one's own money instead of borrowing from a bank. The speaker illustrates the financial loss incurred by traditional car loans due to interest payments and depreciation, and contrasts this with the potential savings and benefits of using insurance policy funds, including tax advantages and uninterrupted compound interest growth. The example provided involves a $30,000 car purchase, with calculations showing the total cost over seven years and the depreciation value of the car at the end of that period.

05:00

💡 Becoming Your Own Bank with Cash Value Life Insurance

In this paragraph, the speaker explains the concept of 'being your own bank' by using a properly structured cash value life insurance plan. They detail how borrowing from the insurance plan allows the policyholder to earn interest on the same money in two places at once. The speaker provides a hypothetical scenario of borrowing $30,000 for a car purchase, showing that while interest is paid on the borrowed amount, the policy continues to earn interest as if the money was never withdrawn. This approach results in the policyholder retaining possession of their money and potentially using the car's resale value to further invest in the insurance plan. The speaker invites viewers to share their experiences with such plans and promotes their book, 'Taming Wall Street,' which covers this strategy in depth. They also extend an invitation to doctors and business owners to learn more about leveraging these financial tools for various investments and purchases.

Keywords

💡Cash Value Life Insurance

Cash value life insurance is a type of permanent life insurance that combines a death benefit with a savings component. The policyholder can borrow against the cash value, which grows tax-deferred over time. In the video, the speaker suggests using this type of insurance to finance major purchases like cars, which is a central theme of the video, as it promotes financial control and tax-efficient wealth growth.

💡Compound Interest

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. The video emphasizes the importance of uninterrupted compound interest, suggesting that using cash value life insurance allows for the growth of money without the interruption that comes from traditional borrowing or purchasing with cash.

💡Depreciation

Depreciation refers to the loss in value of an asset over time due to wear and tear or obsolescence. The video uses the example of a car, which depreciates significantly over time, to illustrate the financial loss that consumers face when purchasing vehicles traditionally, and how using cash value life insurance can mitigate this loss.

💡Interest

Interest is the cost of borrowing money, typically expressed as a percentage of the principal. The video discusses the high cost of borrowing from banks and contrasts it with the strategy of using one's own cash value life insurance policy to finance purchases, thus paying interest to oneself rather than a financial institution.

💡Retirement

Retirement is the period after one stops working and is typically associated with drawing on savings and investments for income. The video's theme includes preparing for retirement by using cash value life insurance to grow wealth and make major purchases in a tax-efficient manner, thus potentially increasing retirement funds.

💡Tax-Efficient

Tax-efficient refers to financial strategies that minimize the amount of tax paid while achieving the same investment return. The video promotes cash value life insurance as a tax-efficient way to grow wealth because the cash value grows tax-deferred, and policy loans are generally not subject to income tax.

💡Banks

Banks are financial institutions that offer services such as loans and savings accounts. The video criticizes banks for their profit-driven approach and suggests that consumers can take control of their financial future by using cash value life insurance instead of traditional bank loans for major purchases.

💡Major Purchases

Major purchases refer to significant financial investments, such as buying a car or a house. The video's message revolves around the idea of financing these purchases through cash value life insurance to avoid the pitfalls of traditional financing methods, such as paying high interest rates to banks.

💡Control

Control, in the context of the video, refers to having authority over one's financial decisions and assets. The speaker advocates for taking control of one's money by using cash value life insurance to finance purchases, thereby avoiding the loss of money to banks and the depreciation of assets like cars.

💡Asset

An asset is a resource with economic value that an individual or corporation owns or controls with the expectation that it will provide future benefit. The video suggests that by using cash value life insurance to finance major purchases, consumers can turn what would otherwise be an expense into an asset that grows in value over time.

💡Taming Wall Street

Taming Wall Street is mentioned as the title of the speaker's best-selling book, which presumably covers the strategies discussed in the video. It symbolizes the idea of taking on traditional financial institutions and practices to achieve greater financial control and wealth accumulation.

Highlights

The speaker proposes a smarter way to purchase cars and prepare for retirement, contrary to traditional banking advice.

A doctor client's idea to use cash value life insurance to purchase a car is used as a case study.

The average American spends more on cars in their lifetime than they save for retirement.

The conventional method of buying cars with loans is critiqued for its high cost and depreciation.

A properly structured cash value life insurance plan offers guarantees, tax avoidance, and uninterrupted compounding interest.

The traditional car loan results in a significant loss after accounting for interest and depreciation.

The concept of 'owning your own bank' through life insurance is introduced as a way to access and use personal funds without losing them.

The speaker explains how to use personal funds for purchases without the traditional bank interest costs.

The comparison of traditional car buying versus the proposed method shows minimal difference in payments but significant difference in financial control.

The potential to recoup and reinvest the money used for purchasing a car is highlighted.

The speaker shares personal experience using this method for various purchases over a decade.

The benefits for doctors and business owners are emphasized, including tax avoidance and guaranteed returns.

The speaker invites viewers to learn more about this method and offers mentorship.

The choice between traditional and smart buying is presented, with a clear preference for the latter.

The speaker's book 'Taming Wall Street' is mentioned as a resource for further understanding.

An invitation to subscribe and engage with the content for more financial insights is extended.

Transcripts

I want to show you what I believe is a

smarter way to purchase cars and prepare

for retirement and it's going to fly in

the face of everything that banks teach

us as far as growing our wealth and

making major purchases I miss for a

doctor client of mine who wanted to use

the money inside of his cash value life

insurance plan to purchase a car for his

son

and so I've diagrammed out the numbers

and want to go through those with you

because at the end of the day I want to

help more Americans strengthen their

financial situation and be ready for

retirement and right now we believe that

banks are on our side and they're just

not they're out for themselves they're

making a killing and marginal spread and

now it's time to take back control of

our money and the use of our money no

more locking it up did you know that the

average American will spend more on cars

in their lifetime than they will ever

save for themselves now you've probably

bought cars if you are watching this and

you've probably lost money on every car

and today I want to change that I want

to show you a better way so this does

require being patient and setting up a

properly structured cash value life

insurance plan but with that comes

guarantees you'll never lose any money

the ability to legally avoid taxes and

the ability to grow your money every

single year that means you're never

interrupting the compounding interest

calculation on your money and so I want

to go through these numbers so the car

is a thirty thousand dollar car at four

point nine nine percent interest for

seven years and when we go through this

you're probably going to say yeah this

is how I've bought every one of my cars

if you've never bought a car in cash

which is a terrible way to buy cars by

the way but let's go through this so

when we run the calculation the pain

is going to be 424 dollars a month for

seven years that's 84 months so at the

end we're going to pay the bank thirty

five thousand six hundred and sixteen

dollars what that is is every month you

take money out of your pocket and you

hand it over to the bank two things

happen

number one you no longer have possession

of that money and number two you won't

see that money again okay so we want to

take back control we want possession of

the money and we want to be able to use

that money again okay and not just

because we sold the car because you're

gonna see right now that because of

interest but even more because of

depreciation

you're gonna lose money on cars it's

just the way it goes

but it doesn't have to be that way so

pay attention okay

so thirty five thousand six hundred and

sixteen is what you've given over to the

bank right so it was originally thirty

thousand dollars so the five thousand

six hundred and sixteen that's the

interest for the right to borrow

somebody else's money it's expensive to

use somebody else's money so I'm gonna

show you how to use your own but after

five years you've got a hundred thousand

miles on that car you've got wear and

tear it's gonna be worth about ten

thousand dollars so that means two

things that means unfortunately you lost

twenty five thousand six hundred and

sixteen dollars on this car purchase but

the good news is you've got ten thousand

dollars to go towards the purchase of

your next car and right now the majority

of people trading in cars with car

dealers are upside down in their loan so

that's that's a bad thing that's that's

negatively compounding against you right

so this is the way that nearly a hundred

percent of financed cars are purchased

there are people that buy in cash and

again in another video I'll show you why

buying your cars and cash is the worst

thing that you can do it's even worse

than using a bank but this is the way

that most people buy their car now

imagine that you have set up your own

bank through a properly structured cash

life insurance plan and you've now got

money that you can deploy that's right

you've got access to your own money and

you can go out and you can use it in the

real world for investments recouping the

lost money on major purchases like cars

or a washer and dryer or whatever it

might be it's your money

if it's in an IRA or a 401k it's locked

up you can't have access to your money

if you don't believe me go try to get

some but with this we can borrow against

that money and have it continue to earn

interest as if the money were never gone

now when I first heard that almost 12

years ago my mind was what was exploding

I was like wait a minute I how do I earn

interest in two places at the same time

with the properly built plan you can so

let's run through the numbers if you

were to be your own bank okay we borrow

the $30,000 and yes we are going to pay

interest on that but this is going to

continue to earn as if the money were

never gone okay so now instead of doing

it the traditional way we're gonna do it

the smart way but you're gonna notice

something the numbers are about the same

the payment is four hundred and twenty

four dollars the time frame eighty four

months is the same the difference is who

has possession of the money right so

instead of taking money out of your

pocket and giving it to the bank

you're gonna take money out of your

pocket and you're gonna stick it in your

other pocket okay so at the end of the

seven years you've recoup you've put

that thirty-five thousand six hundred

and sixteen back in your own account

okay plus in the real world you still

have a vehicle worth ten thousand

dollars you sell that and if you have

the capacity you dump that back into

your insurance contract if not you just

haven't to go towards your next car

purchase but either way at the end of

the seven years you have forty five

thousand six hundred and sixteen dollars

now answer in the comments below have

you ever seen this before

has anyone ever shown us too

and if you already have one of these

properly built cash value insurance

plans have you used it for real estate

or for a major purchase in your own life

I'd love to hear your story I've been

doing this now for over a decade with my

own money we've done our minivan

purchase my truck my Jeep we've done

some some rental properties it's just

incredible what you can do when you have

control and access to your own money so

let me ask you this this is kind of a

dumb question but at the end of seven

years would you rather have lost twenty

five thousand six hundred and sixteen

dollars or would you rather have access

to forty five thousand six hundred and

sixteen dollars I already know the

answer now for most people this is new

and this is what my best-selling book

taming Wall Street covers and I want to

mentor you to having more money in your

life I want to show you how the average

American could take one of the biggest

expenses in their life and turn it into

an asset that will give them more money

than the average person during their

retirement years and for my doctor

clients and my business owner clients

you can do so many things with this

equipment purchasing car leasing all

kinds of things owning your own building

owning your own mortgage there's so many

neat things that you can do and so

doctors business owners those of you

watching this video I invite you to

learn more about this who wouldn't want

to legally avoid taxes who wouldn't want

to be guaranteed that you'll never lose

on your money and who wouldn't want to

compound their money every single year

even when the money is outside of the

plan hey if I can help you reach out to

me and Stephen with a pH at your bridge

plan calm otherwise please subscribe to

this video and hit that Bell so that

you're notified of other great videos

and content that I'm putting out so do

you want to buy the traditional way or

the smart way I leave it up to you but

I'm here to help if I can

thanks for checking out today

is video