IBC Mailbag: traditional advice, policy loans, hyperinflation

IBC Mailbag: traditional advice, policy loans, hyperinflation

I get a lot of questions about Infinite Banking.  For this post I’m sharing a recent email I responded to from a potential client.  Names have been removed.

Hi —-,

Thank you for your questions.  Definitely a lot of craziness going on.  The life insurance industry is not immune either.  Some age groups are being excluded (over 70) temporarily, scheduling exams is a very tall order, and doctors offices seem to be overwhelmed so getting medical records to underwriters is super slow. 

It doesn’t surprise me your traditional financial advisor is skeptical.

They’ve been trained and conditioned to think, recommend, and implement Wall Street based portfolio plans. Life insurance is mostly an afterthought to traditional advisors because they operate on a Wall Street revenue model.

Sadly, Infinite Banking is unknown to the majority of life agents because the life insurance industry doesn’t teach this strategy.   Life insurance industry trains agents to sell policies for maximum death benefit protection.  So it’s the proverbial “can’t see the forest thru the trees” for traditional Wall Street advisors and life only agents which is why working with an authorized IBC advisor is the best way to learn and implement the strategy.  Authorized being the key word there.  (The Nelson Nash Institute is where you can go to confirm your advisors status.)

Infinite Banking isn’t even about the death benefit. It’s not even about having a Whole Life policy. The Whole Life policy is just the best vehicle for the strategy. If it wasn’t we’d be using and recommending bank line of credits, mutual funds, and 401ks/IRAs instead. But none of those options give us control over our money safely and efficiently (…and even tax-free) all in one place. IBC is about freedom over our money—taking control back from banks and Wall Street. Traditional advisors (Banks/Wall Street) want that control outsourced to them so IBC is naturally a paradigm shift from mainstream financial planning. Traditional advisors also don’t practice IBC so seeking advice from them is like going to a foot doctor for a chest pain.

I’d be happy to show you options for retirement income using the strategy.  We can do a virtual appointment and I’ll record it so you can share with your wife.  Schedule here:  www.IBC.guru

Regarding loans, there’s more to it than the loan rate…

Loans are simple interest and calculated at the end of your policy year. Currently, most carriers loan rates are 5% which is fixed for 1 year at a time. Historically, policy loan rates have been between 5-7% because the borrowing rate is based upon a cost of money index used for the largest AAA rated companies in the world. Essentially, policyowners get to borrow at rates available to blue chip corporations. The 5% rate hasn’t budged in 13 years and when they have adjusted up or down, it’s a slow movement. Life insurance companies tie the borrowing rate to this type of corporate money index because it also happens to be where 90% of their investment portfolio resides.

So when I request a loan from my policy, they are more or less approximating the same interest return on their investments as they will now eventually receive on the policy loan I take. Also, keep in mind all the policy loan interest is revenue for the life insurance company. Since these companies are mutual based (owned by policyowners), this revenue from policy loan interest ends up as part of the surplus profit of the life insurance company and what happens to surplus profit? It gets returned to policyowners (you and me, not shareholders on Wall Street like with stock based life insurance companies) as a dividend compounding our cash value and death benefit further.

FYI, there are policies that offer a fixed rate policy loan but fixed rates are generally 7.5 to 8%. My oldest IBC policies are fixed at 7.45%. I rarely use the cash values in these policies because my other policies are at 5%. My family (me, my wife and 3 kids) have a total of 11 policies so we have a pretty substantial pool of money that’s always growing and under our control with access at various rates. I tell people if they are really practicing IBC properly, they will have more than 1 IBC designed Whole Life policy and when that happens you can diversify with policies that have slightly different options depending on what you’d like, including different borrowing rate options.

Another key aspect with policy loans is that because interest isn’t calculated until the end of the policy year, each loan repayment I make goes towards reducing the loan balance dollar for dollar i.e. 100% volume interest. Super consumer friendly.

This doesn’t happen with a bank loan. Banks collect a portion of interest from your payment first, then the difference is applied to the outstanding balance. This effectively delays debt repayment… and don’t forget, all banks are also charging compounding interest while they delay the debt repayment. Think of a mortgage payment. How much of a mortgage payment is interest first? The majority of it. Car loans, credit cards… same story. Not with a life insurance policy loan. Every cent of the loan re-payment directly reduces the policy loan balance. Policyowners come first.

So nominally you might be charged 5% but your effective interest is lower because you reduce the loan balance dollar for dollar. Your effective loan rate (percentage of %)is actually lower

You also determine the loan repayment schedule. You are the banker.

Meanwhile the underlying asset (the cash values and eventually the death benefit) securing each policy loan are compounding in value while the money is used elsewhere for any purpose:  pay down debt, invest in other assets, pay taxes, or even for retirement.  😊 

Nothing like it anywhere else.

With regards to your concern about hyperinflation

Please see visit the Recommended Books page on my website:  https://jlmwealthstrategies.com/recommended-books/

There you will find the book How Privatized Banking Really Works by Robert Murphy, PhD and Carlos Lara.  It’s free to download.  Just click on the image.  On page 340 of the book, they will answer your question about what to do with IBC whole life policies in event of hyperinflation.  The entire book is phenomenal.  You have to get to the end of the book to get to their take on IBC but it’s well worth it.  I have this book available on my website for free to download but I’m including it here in this email.  The arguments are all laid out.  There are other great books on my website with links to purchase, too.  The Pirates of Manhattan is another great book that comes to mind which was thoroughly enlightening, too.  The amount of documentation supporting that book in particular against banks and Wall Street is overwhelming and cannot be refuted.

Hope this email helps answer questions you have about IBC.  Let’s keep in the conversation going.  The more you know, the easier it is to make decisions you and your family can benefit from.


Simplicity is the key to brilliance. It is not the daily increase but the daily decrease; hack away at the unessential. The height of cultivation always runs to simplicity.”  -Bruce Lee


PBS did an eye opening interview with John Bogle, founder of Vanguard, in February 2006, in which Bogle admitted that most mutual funds were terrible investments and that expenses and fees ate up to as much as 80% (yes, you read that correctly… 80%!) of investors’ returns.

How does that work, you ask? Your expense ratio on your carefully selected equity fund is “only” 1.01%?

Let’s take a look:

Frontline: So what percentage of my net growth is going to fees in a 401(k) plan?

Bogle: Well, it’s awesome. Let me give you a little longer-term example. The example I use in my book is an individual who is 20 years old today starting to accumulate for retirement. That person has about 45 years to go before retirement—20-65—and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that’s 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow in that 65-year period to around $140,000.

So far, so good… $1,000 into $140,000 sounds terrific! But let’s look more closely…

Bogle: Now, the financial system—the mutual fund system in this case—will take about two-and-a-half percentage points out of that return, so you will have a gross return of 8%, a net return of 5.5%, and your $1,000 will grow to approximately $30,000. One hundred ten thousand dollars goes to the financial system and $30,000 to you, the investor.

Think about that. That means the financial system put up 0% of the capital and took 0% of the risk and got almost 80% of the return, and you, the investor in this long time period, an investment lifetime, put up 100% of the capital, took 100% of the risk, and got only a little bit over 20% of the return.

WOW!!!! Perhaps you’ve been wondering why you can’t retire at 65! If you don’t understand the math, don’t worry, my brain works best when I can see exactly how the figures add up (or in this case, bottoms out!) So how can 2.5% in expenses and fees turn into 80% of my entire return that Mr. Bogle speaks of?

Here it is, all laid out for you in black and white. The table on the left shows the growth of $1,000 invested by an individual at age 20 until his/her death at age 85, assuming 8% annual growth.

On the right, it shows what happens to that same $1,000 over the same period assuming a 2.5% annual cost, such as a mutual fund 401(k) management fee. Over the 65 years, these annual fees eat up a staggering 79% of what the investor would have earned with no management costs:

Growth of $1000 in 401k: No Fees vs With Fees

Left: $1000 Before Fees; Right: $1000 After Annual Fees

At age 85, $1000 before fees grows to $160,682.  However, after 2.5% in annual fees that same $1000 is worth only $34,250!!
Are you waking up yet?  Have I caught your attention?

And it gets even trickier, if you can believe it because mutual fund investors and the investing public have been “educated” to measure fund management fees and operating expenses as an annualized percentage of fund assets, which makes the resulting expense ratios (the tiny numbers you see like 0.92%) seem almost trivial.

This is because expense ratios represent only about HALF of the cost of owning mutual funds.  You also need to factor in hidden portfolio transaction costs and sales loads which raises your expense ratio up to a full 2.5-3%.

(Full Interview can be found here:http://www.pbs.org/wgbh/pages/frontline/retirement/interviews/bogle.html)

Are you still excited about your 401(k)?  Hopefully you are coming to the same realization I made years ago which is:  A 401(k) is a horrible place to safeguard and grow your wealth.

How many millionaires do you think retire by living off their 401(k)?  Do you really want to have Wall Street take 80% of your nest egg ( with the IRS taking 33% or more of the rest) over your lifetime because you failed to learn about better tax-favored alternatives?

If not, I encourage you to spend some time on my site to learn more about the safest place to build a foundation for your wealth.  Go towww.CashValueBanking.com.

One last thought while I still have your attention.  If you’re not blown away by how the effects of taxes, lack of liquidity, and fees will have on your 401(k), there’s one more thing you ought to know.

Aside from the fees Wall Street is charging you, there’s a 100% certainty that the money in your bank and investment account is losing value each and every day even if your account balance is going up!!  If you’re wondering how that’s possible, we should definitely talk.

Best Regards,

John Montoya

Founder, JLM Wealth Strategies, Inc.


(925) 386-6639

My Process To Get You Started With IBC

As an independent Infinite Banking Concept(IBC)/Bank On Yourself Authorized Advisor, part of my responsibility is to understand what you’re aiming to accomplish so I can put together a Personalized Solution tailored specifically for you. There is no one-size fits all for IBC. (For those seeking information about the 770 Account, please note that Infinite Banking or Bank On Yourself are the more official names for this strategy, and for good measure I am in good standing and endorsed by both organizations.)

My 3 Step Process To Get You Started

1.The Introductory Phone Call

My first goal is to get you familiar with IBC/Bank On Yourself so you are prepared to ask questions during our initial telephone or in-person consultation.  Ideally, I like for my prospective clients to have read my Free Report or watched the videos at www.CashValueBanking.com.

Initial appointments are typically 20 minutes over the phone.  You can schedule your introductory call here: www.vcita.com/v/john.montoya.  During this initial call I will answer all your Infinite Banking related questions and also qualify you to make sure you are a good candidate for IBC.

2.The Financial Questionnaire Appointment

After questions have been answered and the process laid out, if you’re comfortable moving forward with a Personalized Solution, we will then schedule a telephone appointment to complete a Financial Questionnaire.  This appointment typically requires 15-30 minutes depending on your financial situation.

3.The Plan Review and Application Appointment

Our 3rd appointment is the review of your Personalized Solution which will highlight the IBC/Bank On Yourself plan I have created for you.  If everything looks good and you are ready to put the plan into action, we can proceed to the application.

Typical underwriting time can vary but is usually between 25-45 days before an approval is offered for acceptance and delivery.  Once an underwriting decision has been made and assuming the contract is approved, then you and I will make any final changes needed to either modify the plan’s premium specifications or simply request the contract as approved.

The worst case scenario is I have to notify the prospective client of a decline by the insurance company.  It’s important to note that a decline will not rule out the creation of an IBC/BOY plan.  It simply means we have to find an insurable interest like a spouse, child, or sibling.

When you are ready to have our initial telephone introductory appointment (Step 1), please schedule our appointment by going to my online calendar at www.vcita.com/v/john.montoya.

I look forward to helping you get started.

Thank you,

John A. Montoya

JLM Wealth Strategies, Inc.

(925) 386-6639 Office

Bank On Yourself™ Authorized Advisor

IBC™ Authorized Practitioner

The One Most Frequently Asked Question about Becoming Your Own Banker

What’s the most frequently asked question I get? Without hesitation:

Why haven’t I heard about this before? It sounds too good to be true.

There are many reasons.

First, this financial strategy seems to be given a new name every few years.  It is originally known as the Infinite Banking Concept (IBC).  Bank On Yourself is another popular name thanks to Pamela Yellen who’s book by the same name hit multiple best-seller lists in 2009.  It’s also been called Becoming Your Own Banker, Income For Life, the 770 Account, the Presidential Account, Private Reserve Strategy… you hopefully get the idea.  Many names for the same thing.

the Infinite Banking Concept/Bank On Yourself is a savings strategy (not an investment strategy) that also includes a death benefit.  This means Wall Street investment firms do not underwrite, market, or promote IBC/Bank On Yourself. 

Sadly, the life insurance industry does not put much effort into promoting IBC/Bank On Yourself either.

Part of the reason is because IBC/Bank On Yourself policies strictly use only dividend paying Whole Life insurance policies.  There are only approximately 45 mutual life insurance companies left in the United States out of 1500+ that exist today.   Of those 45 or so mutual (owned by policyholders instead of shareholders as with a stock based company), maybe 10 offer a competitive and flexible Whole Life policy suitable to IBC/Bank On Yourself.

If you are wondering what the difference is between mutual and stock insurance companies, here’s a brief explanation:

Any profits earned by a mutual insurance company are rebated to policyholders in the form of a dividend.  In contract, a stock insurance company is owned by investors who have purchased company stock.  Any profits generated by a stock insurance company are distributed to the investors without necessarily benefitting the policyholders.  This is why you want a dividend paying Whole Life policy from a mutual insurance company.

The savings component of a dividend paying Whole Life insurance policy is contractually guaranteed to increase in value every year and the life insurance company is on the hook for those increases regardless of economic conditions.  In comparison, Wall Street cannot offer any guarantees because they do not insure your money against losses.  They are paid to manage assets and you as the investor assume the risk of losses. The death benefit component of the IBC strategy can only be offered by life insurance companies.

Since Wall Street does not profit from the vehicle that best fits Becoming Your Own Banker, they have no incentive to sell it. Wall Street is primarily interested in 1) managing assets from which they can earn an annual management fee and 2) selling products that bear no financial risk to the firm when a clients assets fall in value.

As a better alternative to mutual funds and 401k’s, it is Wall Street’s worst nightmare come true should the public discover they could re-allocate their savings into accounts that are insured from loss, 100% access to their money without penalty, and provide tax-favored growth, distribution, and transfer including a life long death benefit protection. Think about it for a moment. Would you still choose a risky and tax-disadvantaged 401k for you and your family over what I just described?

Another reason why you may not have heard of Becoming Your Own Banker, while traditional banks can offer this specific type of life insurance product, doing so would eliminate the most profitable department of every bank: the lending department. Americans have been conditioned from one generation to the next to outsource their individual banking function to their traditional bank. These banks have no financial incentive to give their customers the ability to develop their own banking system within their larger banking system.

It wouldn’t make any business sense for banks to teach and offer Becoming Your Own Banker because giving people the capacity to save and borrow from themselves would eliminate the need for banks as we know them. The only reason for having a traditional banking relationship would be limited to maintaining a checking account.

Ignorance is indeed bliss for bankers. Sadly, this is so true that not even bank employees know how to set up their own banking system. Ironically, the largest purchasers of cash value life insurance policies are banks.

Banks purchase more high cash value life insurance policies than any other institutions in the world! And they do it for a variety of reasons which any savvy individual would recognize are the same reasons they should be purchasing it for themselves: safety of principal, to enjoy tax benefits, strengthen financial stability, and to have contractually guaranteed growth provided by the most financially secured institutions in the world (life insurance companies).

Due to the volume of high cash value policies bought by banks, the policies they purchase are now known as Bank-Own Life Insurance or BOLI. Corporations do the same thing with policies known as Corporate Owned Life Insurance or COLI.

Also, the mainstream media is largely controlled by the same Wall Street financial institutions that pay for lobbyists to influence members of Congress. If you don’t believe me, ask yourself how quickly Congress intervened to approve TARP money for troubled Wall Street investment firms and bank in 2008? It happened in days.

Compare this to how quickly these same elected officials were willing to reach an agreement on a fiscal budget to avoid a government shutdown. The budget shutdown didn’t get resolved until the final minutes even though Congress had months to reach an agreement.

The point is Wall Street’s advertising and lobbyist dollars have a direct influence on what we hear, read, and watch from our various news outlets. Turn on the evening news and before too long, you’ll be updated on how the stock market fared. Tune into your favorite AM radio station for the same news.

Open any financial magazine, you’ll find strategies created and recommended by Wall Street for the benefit of Wall Street. Sadly, we’ve been conditioned for far too long by the Wall Street marketing machine and now believe that the only option for saving money is investing with Wall Street.

You have to ask yourself why this is? Who benefits? Are there alternatives? If what you thought to be true wasn’t, when would you like to know? Wall Street lost over 35% of your account values twice in the past decade. Do you really have to be convinced that any other strategy would be better?

Hopefully, you get the idea of why people haven’t heard of Becoming Your Own Banker. There are many high power influencing forces (Wall Street, Traditional Banks, and the Corporate Media) that don’t want you to know.

Now I’ll get to the biggest culprit which may surprise you. Believe it or not, life insurance companies are as much to blame as any other entity previously listed. Life insurance companies offer an incredible product called dividend paying Whole Life insurance yet fail to invest the time and energy to properly train licensed agents how these policies are engineered to be the safest and most superior savings vehicle ever created.

The fact that whole life policies have survived over 150 years with little change should be testament enough to even the most skeptical of doubters. What is particularly interesting is that the sale of dividend paying Whole Life policies has seen a substantial increase in the last 10 years thanks to the many scandals and financial collapse of storied firms like Lehman Brothers and Bear Stearns and the demise of others who only survived by being swallowed by their peers (think Merrill Lynch and Morgan Stanley among others).

My hope is that the trend continues. I can’t think of one person who would not benefit from having a safe, tax-free, and guaranteed way to grow their money.

As disappointed as I am in the life insurance industry for the lack of leadership in promoting the Infinite Banking Concept, I understand why life insurance companies choose not to invest the necessary time to train a licensed agent how to design and implement this strategy.

First and foremost, the failure rate for newly licensed agent is extremely high. The majority of new agents fail to make it past their first year. Secondly, any agent trained to sell a policy structured to meet the specific criteria of a Becoming Your Own Banker policy must be willing to take at minimum a 50% pay cut in commission. In some cases, the commission paid on a this type of policy is as great as a 70% cut in commission.

Since the life insurance industry, much like Wall Street advisors, is a sales driven industry, stomaching a 50-70% drop in pay for often what is 5 times the amount of work in educating prospective clients is simply too steep a price to pay.

From the perspective of a life insurance company and any business owner, does it make sense to train an employee who’s likely to be doing something else in 12 months how to make 50-70% less on each case? It simply does not.

It’s my belief that if insurance companies took the initiative to train a sales force on the Infinite Banking Concept, the length of a career agent would increase dramatically and it would also have the dramatic effect of strengthening the financial foundation of Americans who would benefit and prosper from having a rock solid financial foundation the Infinite Banking Concept provides and 401k/IRA/Mutual Funds simply cannot.

Other F.A.Q.’s for Becoming Your Own Banker

The Infinite Banking Concept AKA”770 Account” – F.A.Q.’s

1. Should I start a policy if my income is less than $50,000 a year?

The Infinite Banking Concept/”770 Account” can be utilized for individuals and families of all income ranges. Traditionally, the Infinite Banking Concept (IBC) has been a strategy for the wealthy because there are no rules or restrictions limiting the amount of contributions like with a 401k/IRA.

At the end of the day, this strategy is all about the discipline of saving money. All families certainly stand to benefit from putting their savings where it is safe and can maximize as many benefits as possible both short and long-term.

One of the best long-term benefits of the 770 Account/IBC is the tax-free death benefit which can help improve a families wealth class from one generation to the next. Without this generational transfer, most families are left no better off than their previous generation. The short-term benefits are tax-favored contractual growth and liquidity. Everyone can and should have access to such benefits.

2. How much does it cost to get started?

There is no upfront out-of-pocket fee to work with the 770 Account/IBC Authorized Advisor unless an advisor charges a fee.  JLM Wealth Strategies does not charge a fee for design or implementation and instead is paid a commission by the financial institution the advisor chooses for the strategy.

The commission is based on the annual base premium which for a 770 Account/IBCpolicy is typically a 50-70% reduction in commission compared to financial professionals who can offer a Whole Life contract without the proper design.  The correct design will allow you to accelerate the cash values from day 1 by reducing the commission of the advisor and re-directing that money back to your account.

It pays to work with an advisor who can not only teach you how Infinite Banking works to protect, grow and transfer wealth, but also who is not concerned about fattening their wallet at your expense.

3. What is the minimum needed to open a 770 Account/IBC contract? What is the maximum?

The minimum is approximately $250 per month.  I have clients who are putting well over $100,000 a year into their contracts.

These answers varies depending on the savings, cash flow, and assets of each person. It can be customized to fit your individual needs and wants.

4. Can the policy be canceled without penalty?

Yes, if you have the correct type of contract. The only type of cash value life insurance policy that does not carry a surrender charge period is a Whole Life policy. Universal policies typically have a surrender period of 10 years or longer resulting in a surrender penalty if the contract is canceled before the surrender period ends.

5. Isn’t Whole Life more expensive than Term and Universal Life?

A 770 Account/IBC policy compared to a traditional Whole Life policy sold to the public has a much lower annual base premium.  This design minimizes the death benefit and, therefore, the cost of insurance inside the contract.  Not only is the death benefit minimized but the premium is guaranteed to never increase for the life of the contract.

(It is worth noting that since the death benefit is minimized, you are able to take dollars that would have otherwise supported a much higher death benefit and instead re-direct that excess money into a Paid Up Additions Rider which supercharges the cash value growth inside the contract.  This design creates the most efficient way to accumulate capital within the contract while also providing you with a lot funding flexibility.)

Term life insurance policies offer only death benefit protection for a set period of time.  There is no cash value to be accessed.  Ultimately, the lowest cost policy over the long run are not term policies. Less than 2% of all term policies pay a death benefit.

All universal contracts contain a term “chassis”.  Essentially, you are buying renewable 1 year term insurance coverage for the rest of your life.  The cost increases with age getting exponentially more expensive as you enter your traditional retirement years.  This is increasing cost component is one of the reasons why no type of universal policy is endorsed for the 770 Account/Infinite Banking strategy.

6. What if premium payments cannot be made because of job loss?

In the event of a job loss, premiums still need to be paid. However, since the monthly required base premium is typically 50-70% less than with a typical Whole Life contract the public buys, cash value is building from day 1.  Instead of the being the slow growth contracts financial entertainers like Dave Ramsey and Suze Orman lambast on a regular basis, a 770 Account/IBC contract has substantial cash values available to offset the inability to pay premiums in the event of a job loss for many years.

In the event of a job loss, the owner of a 770 Account/IBC contract will have 3 options to pay premiums: borrow from the available cash value, surrender death benefit, or utilize the dividend to offset payment.

Whole Life locks in the premium and guarantees that it will not rise for the life of the contract. Each year, the cash value is guaranteed to grow. With use of a Paid Up Addition’s rider, the cash values will increase at an exponential rate allowing the contract to have a cash value equal to premium outlay sooner than with a traditionally designed Whole Life policy.

7. Is a health exam required to open a 770 Account/Infinite Banking contract?

Yes. A paramedical exam must be completed for the insurance company to full underwrite your policy.

The exam is usually takes 20 minutes and can be scheduled at the comfort of your home.

8. I have poor health. Do I have to be insured to be the owner of a policy?

You can be the owner of a life insurance policy and not be the insured. For example, a family member like a mother, father, child, grandchild, sister, and brother.

9. Is there an age limit to start a policy?

Yes, it varies on the insurance company. Typically, life insurance stops being offered by the 80th year of life. In rare cases, age 85 is the final year it can be purchased.

10. Can a 770 Account/Infinite Banking contract be owned by a trust?

Yes. We can refer estate planning attorneys who specialize in living trusts and advanced estate planning scenarios.

11. Can the 770 Account/Infinite Banking contract be split between different beneficiaries?

Yes. Also, beneficiaries can be changed in writing by the owner after the policy has been issued.

12. Can other assets/investments be re-positioned into a 770 Account/Infinite Banking contract?

Yes. Careful consideration must be given before the sale of any assets and investments. 770 Account/IBC policies can be designed to incorporate large inflows of premium.

13. When you pay yourself back, are you paying yourself interest?

No.  First, you are not borrowing your own money.  You are borrowing against the cash value you’ve built up in your 770 Account/Infinite Banking contract.

I would also add that “paying yourself back” or “paying yourself extra interest” are simply euphemisms to help explain the benefit of paying your policy loans back quicker.  Additional “interest” you charge yourself on loan repayments will simply accelerate the pay back of the loan.

Once the loan is re-paid, the entire loan payment can now be directed towards the Paid Up Addition Rider of the contract.  This strategy of “charging yourself more interest” is essentially a forced savings strategy meant to harness and reinforce the habit of saving money by capturing your newly created cash-flow before it can be diverted and lost forever to newly created expenses.  This is referred to by Authorized IBC Practitioners as overcoming Parkinson’s Law.

14. What is the difference between a mutual based and stock based life insurance company?

A mutual-based life insurance company is owned by its policyholders. A stock-based life insurance company is owned by shareholders and makes decisions that can benefit shareholders before policyholders.

Only a mutual based life insurance company is recommended for the 770 Account/Infinite Banking Concept.

15. What is the difference between a non-direct recognition vs. direct recognition dividends?

A non-direct recognition dividend is unaffected by an outstanding loan. A direct recognition dividend is can be reduced if a policyholder has an outstanding loan.

The amount of the reduced dividend reduction varies by insurance company and can be different each year.

16. Does your money grow faster with one large policy or multiple policies?

The compounding effect of large numbers favors larger numbers. That being said multiple policies create a pool of money. When all aggregated together this pool of money will compound annually in the same manner as one large policy.

Start funding your banking system by what you can afford to save comfortably. You can add more policies later health permitting. Should health be an issue, you can look at being the owner of a policy on someone you have an insurable interest in.

17. I am considering a 529 college savings vehicle for my child. Are there any advantages to starting a 770 Account/Infinite Banking contract instead?

Absolutely, yes!

First, giving your child the gift of life insurance locks in their insurability for life. With more children being diagnosed with autism, Children’s Diabetes, and other heartbreaking illnesses, you have the ability to lock in a child’s policy while healthy giving them more financial options later in life.

Second, the money saved in a 770 Account/Infinite Banking contract is protected from stock market loss. An IBC policy provides contractual guarantees and predictable growth every year. 529 accounts will fluctuate based on the performance of mutual funds offering no such guarantees.

Third, if your child decides to use the money for something other than higher education, the money in a 529 account will be taxed AND penalized. The cash value in a life insurance policy can be used tax-free no matter what the funds are used for. Never underestimate flexibility.

Fourth, unlike a 529 account, a life insurance policy is not considered an asset under the financial aid formula colleges use thereby allowing your student to potentially qualify for more grants or aid offered by universities.

Finally, giving your child the gift of controlling their financial future by the time they are a young adult will be absolutely priceless.  Imagine if you could have had the benefit eliminating banks from your life at an early age?

18. Why didn’t I start this sooner?

See the most frequently asked question about the 770 Account/IBCClick here.

African proverb: The best time to plant a tree is 20 years ago. The second best time is today.

To get the process started with your 770 Account/Infinite Banking contract, please contact John Montoya at John@JLMws.com.

Other F.A.Q.’s for Becoming Your Own Banker
Other F.A.Q.’s for Becoming Your Own Banker

The Very Secret 770 Account That Sounds Too Good To Be True But Isn’t

The Very Secret 770 Account That Sounds Too Good To Be True But Isn’t

Before I get started on the 770 Account, I want to share with you another little money secret. It’s called a “401” account. It has no guarantees except that you can and will lose money when the market tanks and eventually you will have to pay taxes on it whether you have a gain or not.

Still interested?

It gets even dicier. Your money in this 401 account is illiquid until after age 59.5 and you have to pay fees on the account (even hidden fees that you know nothing about) for life to Wall Street whether they make you money or not.

Can you guess what it is?!?

If you follow the mainstream financial media you likely have one of these 401k accounts and you buy term and think Whole Life is expensive and a waste of money.  You hear something for long enough, chances are you’ll believe it’s true.

In my opinion only a person unaware of a better option would partner with Uncle Sam and Wall Street in retirement.  One entity will tax you for life and the other will bleed your account dry while you take all the risk.

My apologies for poking fun at the 401k which the majority of Americans use to fund their retirement.  My point in leading off with it is to point out that a “secret” financial strategy like the 770 Account isn’t really much of a secret because it’s actually been around for over 150 years.  The difference with a 770 Account compared to a 401k account is that you’re familiar with the latter.  The 770 Account is the one that you either have never heard of it or if you have, you are most likely misinformed or uneducated about it.

I can pretty much guarantee you don’t understand it because the life insurance industry doesn’t even teach this strategy that is now being called the 770 Account by a newsletter putting a new spin on old registered trademark.  And if those in the life insurance industry don’t know the in’s and out’s of this financial strategiy, I’m absolutely positive the traditional Wall Street advisor knows next to nothing except what they might have heard about it in conversation from another person who knows nothing about it.  For the lay person, it’s even more obscure if that’s possible.

In that regard, the 770 Account is very much a secret if you call it by that name.  Lately I’ve been seeing videos on the internet for a secret investment that of course sounds too good to be true.  It’s called the “770 Account” or “the Presidential Account” but it’s best known as the Infinite Banking Concept which is the original trademark and the trusted source behind this strategy.

For those that already think they what the Infinite Banking Concept is about, I’m going to stop you in your tracks.  It is MORE than a Whole Life contract which is simply a product that combines a tax-favored savings component with a death benefit. It is by far not too good to be true because it’s actually better than any other type of savings strategy that exists.  The Infinite Banking Concept is a strategy by which you eliminate uncertainty (Wall Street), usury (bank financing), and taxes (Uncle Sam) from your life forever.

As an IBC Practitioner, I teach this strategy in my practice and I’ve seen the impact it has had in my clients lives.  I consider it a foundation for wealth building.  I highly recommend anyone who comes across the video of the 770 Account to watch it.  Educate yourself a little bit but do your own research about the Infinite Banking Concept.

Don’t believe the online jokers on message boards who know nothing about Whole Life contracts.  This includes the typical Wall Street advisor paid to sell you mutual funds or the lay person who only buys term because they’ve never learned how wealthy people accumulate tax-favored money in these accounts using very specific riders to turbo charge the cash value accumulation.

For a better understanding of how the 770 Account works, talk to an IBC Practitioner who can teach you the concept.  You can verify my affiliation with the Infinite Banking Institute by clicking here: http://www.infinitebanking.org/finder/.   Best of all you won’t have to pay a monthly subscription to a newsletter for learning how you can benefit.



John A. Montoya

JLM Wealth Strategies, Inc.


(925) 386-6639 Office

Bank On Yourself™ Authorized Advisor

IBC™ Authorized Practitioner

CA Life#0C42222

DRE #01390017

Request the Free Bank on Yourself report when you email me.  Be sure to mention “Free Report”.

About Home

About Home

John Montoya began his career in financial services in 1998. Licensed in 40+ states, he has dedicated his career to helping families find financial freedom. John holds a B.A. from the University of San Diego and is a CFP® candidate with the American College. In his free time, John is a series E licensed soccer coach for the Mustang Aztecs in the city of Danville.  In 2015 and 2016, John coached the Aztecs to back to back State Cup titles. John along with his Aztec families volunteer for Grateful Gatherings events to help local families transition to permanent housing when facing homelessness or in crisis.