Tour Our Marshall Family Private Family Banking System, Pt. 2

Do you want to build a family banking system that will provide capital to you and future generations? Come see behind the scenes as we talk about our Marshall Family Bank in real-time. https://www.youtube.com/watch?v=0buUbqGs5QQ Today, we discuss why we added another whole life insurance policy, how our cash value is growing, and our vision for using our family banking system as the foundation to grow generational wealth. So, if you want to see exactly how and why you can grow a family bank strategy to secure capital reserves for your family for generations to come… tune in now! Table of contentsWhy We Use Life Insurance for Our Private Family Banking SystemIdentify Your PrioritiesSafetyLiquidityGrowthThe Evolution of Our Family BankAdding a New Policy to the Private Family Banking SystemHow a Family Banking System Works in Real LifeWhy Get a Second Life Insurance Policy?Myths & Misconceptions About Private Family BankingTake the Next StepBook A Strategy Call Why We Use Life Insurance for Our Private Family Banking System Whole life insurance has the benefit of being a protection asset, as well as a place to store wealth. Just like you would tuck money in the bank, so too can you store money in a specially designed whole life insurance policy. The added benefit is, as Bruce states: [4:45] “You’re storing [money] for a reason or purpose. And if you want to try to maximize your wealth, what you really are looking for is what to do to keep that money in motion.” Whole life insurance does a few things for your savings. It keeps your money safe in a way that banks can’t. It allows you to grow your money with interest and dividends, and it provides you with the opportunity to leverage your money. The leverage piece is important because it gives you access to capital while being able to benefit from uninterrupted compound growth. Ultimately, we’ve chosen whole life insurance because it helps us align our money with our family’s purpose and mission. Identify Your Priorities With wealth-building and wealth preservation techniques, there comes a time when you must identify what is most important to you. The “big three” options are generally safety, liquidity, and growth. While you may be able to have all three components working for you, you only get to maximize two of the three. Choosing which one or two of these components you’re going to prioritize and maximize is critical. Safety Safety refers to how secure your money is. How much are you putting at risk? Is a lot of your money tied up in risky or volatile assets? The safety of your money may also depend on what debt you have and how well-protected your money is from creditors. Likewise, you can make your money safer with things like umbrella and liability insurance, to protect yourself from lawsuits and other things that erode your wealth. For safety, there’s often a cost trade-off. Insurance, for example, can protect your money from prying eyes, lawsuits, and liabilities—but it costs money. Similarly, you may feel that by not investing in riskier assets, you’re not maximizing your dollars. Liquidity Liquidity is how easily you can access your money. If you tie your money up in long-term investments and projects, it’s probably not very liquid. While you may not need all of your cash to be liquid, it’s important for many families to have an easy-to-access pool of money for emergencies and opportunities. Growth Growth is what most people think they want, which leads them to invest unwisely. Prioritizing growth has the potential to skyrocket your wealth. But depending on how you want to achieve your growth, it can be risky. And how much is growth worth if you lose it all? Similarly, you may think it’s a good idea to invest in or acquire lots of low-risk assets. But if they aren’t liquid, how much are they adding to your quality of life? While you may not maximize all three of the above components to wealth, you can have a pretty solid balance. Whole life insurance is one of those assets that scores pretty well in all three categories. Your insurance policy is protected from creditors and the IRS (as well as death), and the cash value is a liquid pool of money. And while the growth on a whole life insurance policy alone won’t make you rich, it does more to keep pace with inflation than the banks, and can be leveraged for investments that grow. [14:24] “We are willing to sacrifice a high growth for the maximum amount of safety and liquidity. And the reason for that is we are confident… we can earn a return in two places simultaneously, and that we can earn a much better return externally, outside of our policy.” The Evolution of Our Family Bank We began implementing the Infinite Banking Concept in 2012 with a policy on Lucas. The policy was with a mutual, dividend-paying company, and had an annual premium of about $10k. This policy served us well for a long time. We took out many policy loans over the course of having it, which we repaid with the cash flow from our business. We had a strong history of paying premiums, though sometimes we only paid the base premium, sometimes the full premium with PUAs, and other times, it was somewhere in between. After a while, we did a 1035 exchange to roll this policy into a new policy. This allowed us to work with a new company and begin a policy with a $20k annual premium. You can learn more about our 1035 exchange in our post, “The Marshall Family Bank: Why We Started a New Life Insurance Policy.” Adding a New Policy to the Private Family Banking System More recently, we added another policy to our family banking system portfolio. The purpose of our family bank strategy is to increase our net investible income, safeguard our money, and create a legacy that supports future generations of our family. Starting a new policy to further increase our cash value (our investible dollars) made sense with that vision. So, we opened a policy on me with $30k of annual premium, as well as a full $2.1 million of term insurance to get up to my full Human Life Value. When designing this policy, we also decided that we wanted to be able to fund it for as long as possible, if we wanted to. It fits into our vision for our money and our family bank strategy. For some people, it may be more important to fund it for a certain time period only. [33:03] “We said if we want to continue funding this, how do we guarantee that we have the ability to put in as much ongoing premium for as long as possible? And really, that’s because we tremendously see the value of not only increasing a death benefit through this growth, but also increasing our cash value and using this policy. The longer you have a policy in force, the more benefit you’re going to have from it.” How a Family Banking System Works in Real Life But exactly what is private family banking in real-world terms? In short, it's a carefully designed strategy using a cash-value whole life insurance policy to create an internal lending system within your family. Imagine you're ready to set up your private family banking system. Let's say you set up a policy with a $20,000 annual premium, which accumulates significant cash value over ten years. Your daughter heads to college, and your son has a new business idea. Instead of external lenders, they borrow from your family banking system. Your daughter’s tuition and your son's startup capital are funded through policy loans. Repayments, including interest, recycle money within your family, enhancing your collective prosperity and teaching responsible stewardship firsthand. Why Get a Second Life Insurance Policy? There are many reasons that getting a second life insurance policy made sense for our family and our private family banking system. When we first bought the policy for Lucas, he was the primary income earner. It made sense to have something in place to replace his income if needed. As our income has increased over the years, we knew we wanted another policy, so it made sense to take a whole life policy out on me, as well. In addition to the protection aspect, this also allows us to save at least 30% of our income. As our income continues to increase, we intend to continue increasing our savings. This helps us create a bigger and bigger pool of wealth with which to invest, spend on our family, and ultimately help ensure the success of future generations. Myths & Misconceptions About Private Family Banking Many people initially misunderstand private family banking, with one of the most common questions being, "What is private family banking—is it about secrecy or tax evasion?"  Absolutely not. It’s a fully transparent, legal, and structured family bank strategy designed to build generational wealth through a cash-value whole life insurance policy. Another myth is that life insurance isn’t suitable for banking purposes. In truth, a properly structured policy provides liquidity, safety, and consistent growth, perfectly positioning it as a powerful tool within your family banking system. Take the Next Step Looking back, we may not have done things much differently. However, we do wish we had gotten an earlier start. If we had started a policy just five years earlier than we did, we could be in a much different spot. Yet hindsight is 20/20, and we’re still grateful that we got started when we did. If you’re thinking about utilizing the family banking strategy, start as soon as you can. It’s an incredible journey, and one you’ll be glad you started sooner rather than later. While it’s important to figure out what you want from your policy and your system, don’t let the details weigh you down too much. Ultimately, something is still better than nothing, and whole life insurance is a flexible asset.