Chapter Three

The Story of Box A and Box B

There are two primary types of “boxes” (financial products or services) offered by the financial industry. We call them Box A and Box B. Their natural economic “counter-action” steals financial growth. What is earned in Box A is given back through Box B. Recognizing this problem, and positioning the “boxes” to be in sync with each other, requires no additional out of pocket cost… and is the safest and easiest road to real financial growth.

“If you understand the problem you’ll know what to do.”
R. Nelson Nash, Founder, Infinite Banking Concepts

Box A
The “Retirement Savings Box”

Today the most common forms of “Box A” are IRA, 401K, TSA and similar government plans. Therefore, that is the primary focus of this section. However, the economic forces at play here are applicable to any Box A and Box B relationship.

Box A primarily attracts money with the “promise” of tax savings. It is very heavily advertised and strongly promoted by the financial industry, including banks and financial planners. That promotion is incredibly successful. It has reached the level of “conventional wisdom”… the general belief that this is something everyone should do without question. Savers are made to feel foolish if they do not “participate”. Yet, in real life case by case analysis, time after time it is seen that participants stand still, or even move backward financially, as a direct result of participating in government plans. How can this be? Read on.

Economic truth often proves to be the opposite of common financial belief. So, at the risk of being labeled social outcasts, we reject the common belief. We submit that participation should not be “automatic” for anyone, and that the first question to ask is: “should I participate at all?” Then, examine the pros and cons of the individual situation. To reach a valid conclusion we must first understand the basic economic forces that impact this financial position. We will explain those forces to allow you to reach your conclusion.

A common belief is that government plans such as 401k, IRA, etc. save income taxes. Do they save you even one thin dime? This is critical. The answer is explained and illustrated in Chapter 4. If you can’t wait, click here… but be sure to come back – there’s some powerful stuff to follow!

Click here to skip to Chapter 4.

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