& How to Avoid Them
THE COSTLY MISSTEPS THAT CAN DERAIL YOUR INFINITE BANKING STRATEGY
Imagine putting years of effort into building your wealth, only to realize you’ve structured your financial system in a way that limits your cash flow, weakens your liquidity, and puts your financial future at risk.
- Have you been told Infinite Banking is a “get-rich-quick” system?
- Are you unknowingly funding your policy in a way that delays growth?
- Do you fully understand how policy loans work, or are you treating them like bank debt?
Too many people jump into Infinite Banking without understanding the nuances, and they pay for it in lost opportunities and frustration. Worse, some even walk away, thinking IBC “doesn’t work” when in reality, their policy was just set up incorrectly.
The good news? These mistakes can be avoided, if you know what to look for. Here are the five biggest Infinite Banking mistakes people make and exactly how to avoid them.
MISTAKE #1: CHOOSING THE WRONG TYPE OF LIFE INSURANCE POLICY
(ESPECIALLY INDEXED UNIVERSAL LIFE!)
Many people assume any whole life insurance policy can be used for Infinite Banking. This is false, and one of the biggest reasons people fail with this strategy.
Worse, some people are convinced to use Indexed Universal Life (IUL) policies for Infinite Banking, believing they offer the best of both worlds: life insurance and market-linked growth. But IULs are fundamentally flawed for IBC.
WHY INDEXED UNIVERSAL LIFE (IUL) IS THE WRONG CHOICE FOR INFINITE BANKING:
- No Guaranteed Growth: Unlike Whole Life Insurance, IUL policies tie their cash value growth to a stock market index, meaning returns fluctuate. This removes the predictability and stability necessary for Infinite Banking.
- Participation Rate & Caps: Even if the market performs well, IUL policies impose caps on how much growth you actually receive. If the market gains 12% but your IUL has a 7% cap, you lose out on significant compounding power.
- Increasing Cost of Insurance (COI): As you age, the cost of insurance in an IUL rises annually, making policies more expensive over time. This can drain cash value and even cause the policy to lapse. IULs are nothing more than continually renewable term insurance, and the cost of that term increases every year. Yikes!
- Hidden Fees & Surrender Charges: IULs come with management fees, administrative costs, and surrender charges if you want to exit the policy or transfer funds to a properly structured Whole Life policy. Fees, like taxes, destroy your ability to build wealth.
- Flexibility That Works Against You: While IULs allow flexible premium payments, this also means the insurer can increase the required cost over time. Whole Life Insurance provides fixed, predictable premiums.
HOW TO AVOID THIS MISTAKE:
✓ ONLY use a properly structured, dividend-paying Whole Life Insurance policy from a mutual insurance company.
✓ Work with a certified Infinite Banking Strategist, not just any life insurance agent.
✓ Ensure the policy is designed for high early cash value growth, not just a large death benefit.
Key Takeaway: Not all life insurance is created equal. IUL policies are NOT designed for Infinite Banking, while properly structured Whole Life policies are.
Check out: Indexed Universal Life (IUL) vs. Whole Life Insurance
MISTAKE #2: UNDERFUNDING OR STRUCTURING THE POLICY INCORRECTLY
Some people try to start Infinite Banking with the lowest possible premium. Others pay too much into the wrong parts of the policy. Either way, they limit the system’s effectiveness.
WHY THIS IS A MISTAKE:
- Underfunding a policy delays cash value accumulation, limiting the continuous compounding that makes Infinite Banking so powerful.
- Failing to structure Paid-Up Additions (PUAs) correctly reduces liquidity and flexibility.
- Funding the policy incorrectly can trigger a Modified Endowment Contract (MEC), making it taxable.
HOW TO AVOID IT:
✓ Commit to funding your policy adequately to accelerate cash value growth.
✓ Ensure the right mix of base premium and PUAs for maximum liquidity.
✓ Avoid turning your policy into a MEC by working with an expert who understands IRS guidelines.
Key Takeaway: How you fund and structure your policy determines how quickly you can use it as your private banking system.
MISTAKE #3: TREATING POLICY LOANS LIKE TRADITIONAL DEBT
One of the biggest advantages of Infinite Banking is the ability to borrow against your policy’s cash value while your money keeps compounding. But many people misunderstand how policy loans work.
WHY THIS IS A MISTAKE:
- Some people fear taking policy loans, thinking they are “borrowing their own money.”
- Others fail to repay policy loans strategically, reducing long-term efficiency.
- Mismanaging loans can create unnecessary policy loan interest accumulation.
HOW TO AVOID IT:
✓ Understand that a policy loan is NOT withdrawing your money—it’s borrowing against it while it continues growing.
✓ Set a smart repayment schedule to maintain liquidity for future opportunities.
✓ Use policy loans strategically for investments and wealth-building, not reckless spending.
Key Takeaway: Treat policy loans as a financial tool, not traditional debt. This is how the wealthy leverage money to grow even more wealth.
MISTAKE #4: RELYING ON THE WRONG ADVISOR
Not all financial professionals understand Infinite Banking. Many traditional financial advisors discourage it because it goes against their Wall Street-based business model.
WHY THIS IS A MISTAKE:
- Traditional advisors focus on 401(k)s, mutual funds, and government-controlled retirement plans.
- Many life insurance agents lack the expertise to properly structure an IBC-friendly policy.
- The wrong advisor may recommend policies that benefit them more than you.
HOW TO AVOID IT:
✓ Work with a certified Infinite Banking Strategist who understands cash flow strategies, not just life insurance.
✓ Choose someone who practices Infinite Banking themselves, not just sells it.
✓ Look for transparency, experience, and a strong track record of helping clients succeed.
Key Takeaway: The right Strategist makes all the difference. Working with an expert ensures your policy is optimized for long-term success.
MISTAKE #5: THINKING OF INFINITE BANKING AS AN “INVESTMENT”
Infinite Banking is not an investment—it’s a banking strategy. Many people get frustrated when they compare it to stock market returns without understanding its true purpose.
WHY THIS IS A MISTAKE:
- Whole life insurance is not designed to replace your investments; rather, it’s designed to enhance them.
- Comparing policy growth to stock market returns ignores tax advantages, liquidity, and risk mitigation.
- Misunderstanding Infinite Banking leads to unrealistic expectations and disappointment.
HOW TO AVOID IT:
✓ Think of IBC as a wealth-building system, not a stock market alternative.
✓ Use IBC to store and access capital while still investing in real estate, businesses, and other assets.
✓ Focus on the long-term benefits: tax advantages, control, and guaranteed compounding growth.
Key Takeaway: Infinite Banking bridges the gap between saving and investing—it’s about liquidity, control, and leveraging your wealth more efficiently.
Check Out: Infinite Banking Concept
FAQS: CLEARING UP COMMON MISCONCEPTIONS ABOUT INFINITE BANKING
Q: Is Infinite Banking a scam?
A: No! Infinite Banking is a strategy used by the wealthy and major corporations for over a century. When structured correctly, it’s one of the safest and most effective ways to store and grow wealth tax-free.
Check Out: Is Infinite Banking a Scam?
Q: What if I need to stop making premium payments?
A: Properly structured policies have flexibility built in. You can use cash value to cover premiums or reduce your contributions as needed.
Q: Are policy loans risky?
A: No. Policy loans are secured by your own cash value, and since you control repayment, there is no risk of default or credit damage.
Q: Can I use Infinite Banking alongside other investments?
A: Absolutely! Infinite Banking enhances your overall financial strategy by providing liquidity, stability, and tax-free growth while still allowing you to invest in real estate, businesses, or other ventures.
Check Out: How Real Estate Investors Use Infinite Banking
Check Out: How Smart Business Owners Use Infinite Banking
AVOIDING THESE MISTAKES WILL UNLOCK INFINITE BANKING’S FULL POTENTIAL
If you’re serious about taking control of your wealth and breaking free from traditional banking, avoiding these mistakes will set you up for long-term success.
Check Out: The Tax Benefits of Infinite Banking
Your Next Steps to Financial Control
“Now What? How Do I Keep This Momentum Going?”
I get it, after reading this, you probably have questions like, “Where do I start?” “How do I make sure I set this up correctly?” and “What if I need more guidance along the way?“
That’s exactly why I’ve created resources to help you stay on track, get your questions answered, and implement this system with confidence.
WEALTHWISE BANKING PODCAST
Think of this as your weekly deep dive into everything we covered here AND MORE, but in real-world conversations. What You’ll Find Inside:
✓ Real-life IBC success stories from entrepreneurs and investors.
✓ Deep dives into Infinite Banking strategies that you won’t find on Google.
✓ Exclusive interviews with financial experts on building generational wealth.
Listen & Subscribe: WealthWise Banking Podcast
Why This Matters: The more you hear about Infinite Banking in action, the more it becomes your new financial reality.
BLOG ARTICLES & EDUCATIONAL VIDEOS
Not ready to jump on a call yet? That’s okay. Start by learning more through our blog and video library on our website. Inside, you’ll find:
✓ Step-by-step guides to setting up and optimizing your Infinite Banking System.
✓ Case studies of people just like you who are using IBC to take financial control.
✓ Answers to all the common objections and misconceptions about this strategy.
Read & Watch Here: Common Cents Solution
Why This Matters: The more you see this system in action, the more clarity you’ll have in applying it to your own life.
SUGGESTED READING LIST
Want to go even deeper? Here are four books that every Builder should have on their shelf:
✓ Becoming Your Own Banker–Nelson Nash (The original IBC blueprint—read this first!)
✓ The Creature from Jekyll Island–G. Edward Griffin (Understand how banks really work.)
✓ What Would the Rockefellers Do?–Garrett Gunderson ( How Builders create lasting wealth.)
✓ Money: Master the Game–Tony Robbins (Money strategies of the ultra-wealthy.)
Why This Matters: Infinite Banking isn’t just a strategy, it’s a paradigm shift. The more you study, the stronger your financial foundation will be. You can access these books on our website here: Books
GET A PERSONALIZED STRATEGY CALL
This is where the rubber meets the road. If you’re serious about transforming your financial future, let’s build your personalized Infinite Banking System.
Book a Free Strategy Call Here: Contact
What We’ll Cover:
✓ Your Financial Goals – Where are you now, and where do you want to be?
✓ IBC System Design – How to structure your policy for max growth & flexibility.
✓ Your Next Steps – Get clear on exactly what to do after this call.
Why This Matters: Builders take action. The fastest way to implement this system is to get expert guidance and build it the right way with Strategists who practice what we teach.
