There seem to be a lot of advertisements by "Bank on Yourself", promising to show how you can invest in a certain type of life insurance policy. Is this really a legitimate investment strategy, or just another scam trying to sell information that doesn't really gain you anything?
Technically, this doesn't seem like a scam, but I don't think the system is beneficial. They use a lot of half-truths to convince you that their product is right for you.
Some of the arguments presented and my thoughts.
While I don't think this is a scam, it's outrageously expensive and not a good financial choice.
Oddly enough, I started to research the "Bank on Yourself" strategy today as well (even before I'd ran across this question!). I'd heard an ad on the radio for it the other day, and it caught my attention because they claimed that the strategy isn't prone to market fluctuations like the stock market. It seemed in their radio ad that their target market was people who had lost serious money in their 401k's.
So I set about doing some research of my own.
It seems to me that the website bankonyourself.com gives a very superficial overview of the strategy without truly ever getting to the meat of it. I begin having a few misgivings at the point that I realized I'd read through a decent chunk of their website and yet I still didn't have a clear idea of the mechanism behind it all. I become leery any time I have to commit myself to something before I can be given a full understanding of how it works. It's shady and reeks of someone trying to back you into a corner so they can bludgeon you with their sales pitch until you cry "Mercy!" and agree to their terms just to stop the pain (which I suspect is what happens when they send an agent out to talk to you). There were other red flags that stood out to me, but I don't feel like getting into them.
Anyway, through the use of google I was able to find a thread on another forum that was a veritable wealth of knowledge with regard to the mechanism of "Bank on Yourself" how it works.
Here is the link: Bank on Yourself/Infinite Banking...
There are quite a few users in the thread who have excellent insights into how all of it works. After reading through a large portion of the thread, I came away realizing that this strategy isn't for me. However, it does appear to be a potential choice for certain people depending upon their situation.
I haven't read the book and have no intention of reading it.
This definitely looks like a forced savings plan with "Whole Life Insurance" as the theme – which is pretty bad for someone who is able to take care of his finances.
It would be good for someone who is not very good with his finances and wants to be forced into savings, but then even for those people it would only help a little; there are enough clauses that would make things more bad for him. i.e. one can choose to take a loan, pay only interest etc.
No book is going to help you build a savings habit. One has to realize and spend what is essential (it means not buying or doing tons of things) and putting quite a bit away for a rainy day. After this, comes investing wisely...
protected by Chris W. Rea Feb 24 '12 at 15:25
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