Scarcity, Risk, and Wealth Transfers
Three Problems Magnified by the “Box” Approach to Personal Finances

An Alternative:

Personal financial economics combined with Infinite Banking Concepts begins with a “reservoir” approach to finances instead of a “box” approach. The core of the “reservoir” approach is “being your own banker”, and expands outward.

This approach saves financial costs, which commonly run in excess of 34% of disposable income, and uses those costs to build personal wealth while simultaneously creating a strong “moat” of protection around the “financial castle”. For most, the costs that can be “recaptured” and invested is far more than is being saved currently.

Banking is the most profitable business in history. Banks do not use “boxes” for their money. They sell “boxes” to us, which is the source of their profit and success. They use a “reservoir” of money, and preserve the reservoir by imposing penalties and fees if the “box holders” remove their money. They move money through a series of uses, thereby multiplying returns. You can do this too by using the same economic principles. The basics of “being your own banker” can be learned in about an hour.

What do banks do?

Banks hold huge amounts of cash in whole life insurance as a liquid “reservoir” of money to move in and out of their banking activities. The numbers continually change upward, but as of December 31, 2006 their annual reports show the following cash in BOLI (business owned life insurance):

And… on and on, bank after bank. That’s in billions. Perhaps we should do what they do rather than what they say.

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