Chapter Eight

Bringing it all together

In previous chapters you learned about wealth transfers: your wealth being systematically transferred to the financial industry and government through excess taxes, interest paid, interest lost (not earned), fees, and certain insurance costs. Since interest expenses alone typically consume 34.5% of discretionary income, the negative impact of total wealth transfers is huge. Further, it was shown that catastrophic wealth transfers plow through the gaps in financial security left by “scarcity of money” influenced decisions. 

You learned that your wealth transfers compound in value, but in someone else’s account. This is called “(lost) opportunity cost” and it compounds into your lost fortune over time. The lost fortune is typically greater than the realized fortune – what you are able to keep.  

You learned that the basic rule of physics – every action has an equal an opposite reaction – has a counterpart: every financial action has an economic reaction – ripple effects – called “macroeconomics”. While they may appear to be unrelated, those effects take from one pocket much of what is earned in the other pocket.  

Further, you learned how banks increase their rate of return exponentially through the use of “velocity of money” strategies. By locking your money in “boxes” you hand your power of “velocity” over to them. Whether you are aware of any of this doesn’t matter: the losses are still real. 

However, just as the Chinese symbols for crisis and opportunity are one and the same, the negative impact of wealth transfers holds great potential for increasing your wealth. The three primary economic principles at the core of “Infinite Banking with Personal Financial Economics” – opportunity cost, macroeconomics, and velocity of money – can be put to work for you instead of against you to turn current and future costs into compounding personal wealth. 

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