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How To Be Your Own Bank

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How could you possibly be your own bank? In the book, What Would The Rockefellers Do? by Garrett B. Gunderson, he shows how ordinary people have a type of life insurance available to them to store up cash so they can borrow from themselves.

This allows you to use your own money to pay for things, while still making money on that money.

I know when I first heard this concept I was thinking how can that even be possible? Well, let’s dive into it.

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These ideas are based on my personal experience and opinion and should not be considered professional financial investment advice. Furthermore, the ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Picture of a glass building with the word BANK on it - Text overlay "How to be your own bank."

What does it mean to be your own bank?

To be your own bank you will need a system that allows you to have the following three things:

A Place To Store Your Money

You will want a place that isn’t your wallet, mattress, or other location around your home to store this money.

This means that you could use a real bank but they will just use your money to make money and give you almost no interest for doing so. I made $0.11 for one month for having $5,000 in an account recently.

You could use a company that could give you guaranteed interest payments on your money yearly. If those aren’t met the company will shore up the difference so there is little risk.

A Place To Invest That Money

Ideally, you want this money to make as much as possible. Sitting in a bank you won’t even get back the amount of inflation, when inflation is low, let alone in record 40-year highs.

If you follow the advice in the book What Would The Rockefellers Do? by Garrett B. Gunderson and setup a specific type of cash advantage whole life policy then you can do the following:

Have guarantees better than most mutual funds and bonds on your cash value.

Have guaranteed minimum returns on the cash value in your policy yearly. If the market downturns and doesn’t perform as well as the guarantee then this whole life insurance company will reimburse the difference. If it does better than the minimum you keep it.

How to invest on autopilot

Where Is Your Money?

Most people don’t know what they are invested in when they start a new job and open up a 401k.

Do you know exactly what the fund or funds you are investing in even are?

How much are you spending on fees?

What if there was a way to invest in the biggest companies in the world easily and with fees less than 0.1%?

Click here to read how to invest on autopilot to learn more.

A Place To Easily And Quickly Withdraw Your Money

If you have your money in a traditional 401k or IRA you can access that money but it could take weeks and you will incur taxes AND penalties on it.

If you have a Roth IRA or 401k then you can remove the principle only without penalty, but the money can take a week or more to arrive.

With cash value whole life insurance you can receive your money tax-free and without penalties in 24 to 72 hours.

Also if you borrow against your policy you are still making the return percentage on that money. If you don’t repay it before you die then they will take the money you borrowed out of the life insurance policy payout.

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The benefits of being your own bank

If you have enough cash value in your policy you can loan the money to yourself instead of asking a bank.

The top 3 purchases that are made with these policies are a down for a home (primary and especially rental properties), cars, and vacations.

You could view this as a savings account with benefits.

It grows interest at around 6% to 8% a year with guaranteed rates. It makes those rates on the money you withdraw because you could pay it back or let the life insurance pay it when you die. It is 100% tax-free and in many states, it can’t be taken in a lawsuit.

Fund Business Expenses

In addition to that, many people have a legal side business that could borrow money from a private individual and pay them a monthly payment with interest in line with what a bank would charge.

For example, your business is expanding and you need to purchase a company car. You contact a bank and find out they will loan you $25,000 at 9% interest.

Instead, you withdraw $25,000 from your cash value life insurance policy. You set up a loan payment plan with the business to pay you back the money at 9% interest over the next 3 years.

Now that $25,000 is making 6% to 8% guarantees from the life insurance policy and an additional 9% from your company.

How to be your own bank

You will need to contact a life insurance broker that can set up a cash-value whole-life policy for you. Not all whole-life agents know how to do this. If you are interested in this email me at Dwight@dwightscull.com with Whole Life in the subject line.

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The challenges of being your own bank

The major drawback to these policies is they are expensive. Many times over the price of term life insurance.

They are double or more the cost of normal whole-life policies because you are over-funding the policy to build up cash value as fast as you can afford.

The benefits of being your own bank outweigh the challenges if you have maxed out your 401k (IRA if you are still eligible for one and in my opinion this is a better use of your money than navigating the backdoor IRA from a tax perspective).

If you have the funds over funding a cash value whole life insurance policy can provide you tax-free money for buying a home or putting 20% down on a rental property to make even more passive income.

Others will use these funds to supplement their retirement. Since these are post-tax funds you can use them to make sure you don’t have to pay much if any taxes in your retirement.

You can do this by taking out as much pretax money from your 401k to stay under the tax-free limit per person or couple and then taking any of the rest of the money you need to live on out of your cash value.

If social security is still around then you will need even less from the cash value insurance policy.

How to achive financial freedom - a man is lying on the beach holding a laptop and looking very relaxed

How Can You Succeed Financially?

There is a clear path toward financial success and security.

It isn’t just being a worker for 45 years. Although for some it may involve that.

If you want to know what practical steps are needed to achieve financial freedom read my article on how to achieve financial freedom.

You can be your own bank if you’re willing to invest

Once an IRA is no longer an option you may want to look into how to be your own bank. I will not say that this is cheap.

My wife’s policy is over $1500 a month for the first 10 years. Then it drops to just the price of the whole life policy for another 10 years. After 20 years of paying into this policy, it then pays itself with the cash value invested in the policy.

Text on a green cover "5 Things to do to live comfortably and stop living paycheck to paycheck" free PDF

Are you living your best life or are you stressed about paying the bills?

In this quick 2-page PDF, I cover 5 ways you can get your financial life back on track.

I used to live paycheck to paycheck and after years of paying off debt and maximizing my investments I am now able to save and invest more than 45% of my wife and I’s gross pay.

This allows me to live comfortably (not a crazy rich person) and sleep better at night. If you want this let me know where I can send it to you below.

Wow, you read a lot to get here. Can you do me a favor, please? Can you leave a comment if this was helpful to you or if I missed something? Alternatively, it would help me out a lot if you shared this content with those that might need to see it. Thanks, you are the best!

Build Generational Wealth – Tax-Free

I used this to create a policy for my granddaughter as it is how to set up generational wealth that is tax-free and can be used for anything.

The other advantage is that I can control the money so if she turns 18 and isn’t trustworthy yet then the money isn’t automatically turned over to her.

You see this isn’t just a way to build a retirement nest egg for you. If you have the means you can set this up for your children as well.

Picture of Dwight Scull sitting in his gaming chair in his office surrounded by board games and Role Playing Books.
“Marriage is hard. Divorce is hard.
Choose your hard.
Obesity is hard. Being fit is hard.
Choose your hard.
Being in debt is hard.
Being financially disciplined is hard.
Choose your hard.
Communication is hard. Not communicating is hard.
Choose your hard.
Life will never be easy. It will always be hard.
But we can choose our hard. Pick wisely.”

About Dwight Scull

I have been married to my wonderful wife, Rebecca, who puts up with me since 1999. I am a proud father to my Gen Z, son, and daughter-in-law. Grandfather to my favorite granddaughter who was born in 2021.

I lost my mom, father-in-law, and 12 others in 2013 and was DEEPLY in debt. I started reading and watching all the financial info I could find.

I chipped away at my debt and went from a negative $105k net worth having one home paid off, no credit card debt, and saving/investing 45%+ of my gross salary.

I used these daily habits to lose 100 pounds and keep it off.

I believe that you can overcome any challenge you face if you just take small daily actions and be consistent with them. It is how you will be financially successful.

Join my free Facebook group to get a ton of free resources to help you get out of debt, learn how to invest your money and work toward having the option of retiring early.

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