Episode 32 |

Turn Your Life Insurance Policy into a Nest Egg With Infinite Banking with Ray Poteet

What if you could create your own, personal banking system-where you earned back all of the interest and principle on your savings and loans? Ray Poteet, founder of Living Wealth, shares exactly how to create life insurance accounts that become a financial resource for you and your family.

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This Week’s Guest:

Ray Poteet is the founder of Alpha and Omega Financial Services, which has recently been rebranded to Living Wealth, and uses the system of Infinite Banking. Using his concepts and financial products, he has provided countless homes, college educations, and retirement plans for families, bettering the lives and financial situations of people around the country.


Becoming your own banking system isn’t just for the ultra-wealthy. Ray Poteet, founder of Living Wealth, has been helping people to stop paying high interest rates to traditional banks, and start earning that income back themselves through whole life insurance policies. Not only can you earn back your interest and principle, your money will also grow at a much higher interest rate than a savings account, locked in and guaranteed.
We Discuss:

  • How Infinite Banking creates your own, personal banking system.
  • Using your account for loans, and why you should want to pay high interest rates.
  • The amount of time it takes to double your income, and how you can change that.
  • Who can use and benefit from the Infinite Banking system.

What Is Infinite Banking?

  1. Infinite Banking is a way to create your own private bank and use it rather than a conventional bank.
    • You can take money out for loans, and use it for storing money, like a traditional bank.
    • This allows you to keep the profit from interest rather than allowing the banks to keep the profit.
  2. Banks use life insurance policies to protect and store their money in a safe environment, and that earns them a good return.
    • It’s called BOLI, which stands for Bank-Owned Life Insurance, and banks all around the world are the biggest purchasers of permanent life insurance.
  3. Infinite Banking mimics what banks do on a scale that each person can handle.
    • This has been a strategy of the ultra-rich for decades-to put money into life insurance policies for themselves, family members, key people in their company, etc.
    • Ray has it on all of his family members and employees-he has a little over one hundred in total.

How it Works

  1. You start a policy and as you keep paying into it, it builds value over time.
  2. You can’t expand the policy beyond what you initially set it so you just keep paying what you initially set it up for, and that’s why you have to keep adding policies.
  3. It becomes very efficient in the 3rd year and beyond, by just moving money from one policy to another it can make huge amounts of money in a tax-free environment.
  4. The cash value build up of life insurance is not taxed-this month, Rays cash value build up was over $70,000
    • When you pull money out of a 401K, you’re taxed. With this, you pull the money out as loans and the entire cash value of the policy continues to compound interest.
  5. When most people think of life insurance, they think of death benefits, but Ray does exactly what the banks do to turn death benefits into cash now.
    • They buy the smallest amount of life insurance for the maximum amount of money to develop the best cash.
    • You can take out loans for your own purposes, buying cars our houses, or loan out money to family, etc. and you’re not taxed on that, like you’re taxed when you pull the money out of a 401K.

Using Your Bank for Loans

  1. If you use your account to give out loans, you want to make sure that you do it exactly the same way a bank does-even with your children.
    • If you gave someone money for a car, there will be a lien on it, and that will be you instead of a bank’s name.
    • Stephan loaned his daughter $9,000 and had her sign a promissory note with all the terms and conditions.
  2. As part of the legacy program in Infinite Banking, your family is going to get all the money back.
    • They don’t have to wait until we die, Ray’s children use the money for houses, vacation, education, and trips right now, but if he were to pass, his children would get all of the money back that they spent as well.
  3. You want to charge market-rate interest to family members, even though you may feel compelled to cut them a great deal.
    • When you’re paying interest to yourself, you want a high rate.
    • By paying the market-rate, they don’t only get the interest back but the principle.
    • An example is Ray’s grandson who just got a car.
    • The car was $30,000, and with interest he paid almost $37,000.
    • The actual value that he earned through that transaction is about $52,000 that he can now use from them and will receive upon their death.
    • That’s what the policy grew to with him putting the money in, you can isolate a loan within the policy and show what it created in true value, and what is available to them.
    • Another example is Ray’s daughter, she bought a $206,000 home and borrowed an additional $400,000-with those loans, her account grew to $1,441,000.
    • It all comes back to your family, specifically, so if your friends or family are going to pay that interest rate anyway, they may as well earn additional cash on the interest rate that they can get back or use in the future.
  4. In the event of a death, and using Ray’s policy as an example, he has $2.7 million dollars loaned out.
    • If something happened to him his wife would receive $2.7 million dollars less from the insurance company, because he already has taken that money, loaned it out, and used it.
    • Because the loan is paid off to the insurance company, the creditors would continue to pay his wife and she’ll get $68,000 for the next 71 months-that’s a little over $4.6 million.
    • She would still get all of the money over the long-term, and the loans would still have to be paid back.

Who Can Use Infinite Banking

  1. Infinite Banking has only been used by the wealthy and powerful for many years, but more and more people are learning that they, too, can benefit from it.
  2. You can actually do debt-consolidation and use the power of interest to start building that money-machine, so even if you aren’t making much or have mountains of debt, you can use Infinite Banking.
  3. Ray has clients who put in as little as $150 a month, to clients who are putting in $2,000,000 a month.
  4. The key is recapturing the money you make by properly investing, using, and choosing interest rates.

The Types of Life Insurance Policies

  1. They type of policy that you want is called Whole Life Insurance.
    • It needs to be through a mutual life insurance company and not one that a stockholder holds.
    • That’s a mutual company where the policyholders are the owners of the company.
  2. There haven’t been any mutual life insurance companies that have collapsed during the crisis that our country went through, although many banks and many insurance companies have.
    • Mutual life insurance companies are regulated by the states rather than by the Feds.
  3. If you set up your life insurance policy through a stockholder-held life insurance company, the profits go to the shareholders rather than to the policyholders.
    • If a mutual company makes loans and makes a profit, those are paid back to the policyholders in a form of a dividend.
    • Those dividends are not taxable because it’s a return of premium, which is not a taxable event.
    • What you have as an ongoing greater and greater amount of money coming to you tax-free every year in the form of a dividend.
    • The policyholder basically owns the company.

Locked In Interest Rate

  1. You get locked in so that a 4% interest rate is the minimum that you would get per year.
    • On a savings account, most people say 1% or .5%, and that’s not guaranteed-that’s what’s currently being paid.
  2. Life insurance actually has a guarantee, and you can manipulate the rate you get by using 4% as a base in paying yourself a higher rate on a tax-free basis.
    • When Ray get’s the principal and interest back on his car, it will be with an additional $108,000 because of how he manipulated his interest rate to get that return over a five-year period.

Financial Discipline

  1. When you pay the government first-the tax comes right out of your paycheck.
  2. If you pay yourself first, put that away before you even notice so that it starts to earn interest and you don’t touch it.
    • If you just take that money off the table immediately before you even see it, you won’t even think about spending it all or wasting it.
  3. Every time someone creates credit card debt, they are reducing their spendable income and increasing their expenses.
    • When you use your money, you pay yourself interest just like you would a bank or a credit card, and Ray teaches his clients how to earn it back.

Links and Resources Mentioned

Living Wealth

The Tree of Wealth: How to Build a Legacy

Becoming Your Own Banker by R. Nelson Nash

Phil Town on The Optimized Geek

Lifestyle Banking Course

Get Optimized!

  1. The first step in investing in any way is to determine what you can afford. Create a budget and decide what you can set aside for your account every month.
  2. Create a contract with terms and conditions for any loans that you may give out to family or friends, it’s important for them to understand that it will financially benefit them to pay it back.
  3. Check out Ray’s course called Lifestyle Banking Course. It’s nine courses that breaks down Infinite Banking and allows you to contact Ray for a free hour webinar, at no cost to you.

Thank you for listening!

As always, thank you for tuning in. Please feel free to contact me or leave a comment. If you enjoyed this episode, please share it!

One thought on “Turn Your Life Insurance Policy into a Nest Egg With Infinite Banking with Ray Poteet

  1. Hi Ray
    I have figure it out the key to IBC is the velocity of money. Money in motion and that means money moving by taken a loan and repay the loan. Keys take a loan and repay the loan you take out of your par whole life.

    Fred Perry
    Halifax, Nova Scotia Canada

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