When looking at bank accounts, the median balance for Americans is about $4,500.
If your bank balances are close to the country’s median, then you may want to consider converting to a family bank.
This banking strategy helps you grow your wealth by keeping it within the family through the generations. You may hear it referred to as private family banking or infinite banking.
Read this guide and learn about your family banking options.
What Is Family Banking?
The strategy behind family banking is to grow the family’s overall wealth through high cash value life insurance policies. Each generation contributes to the overall wealth while also safeguarding the built-up cash.
Family members can then use this buildup to borrow against it or help grow it. Banking as a family is the modern version of having a family business.
In previous generations, someone would start a business, and the entire family would work towards growing that business. Working in various positions taught family members how to work hard and earn their success.
In modern times family members are more mobile and work in a variety of industries. Because of this, the family business structure is less common. This is where family banking steps in.
Grow Assets
Using permanent life insurance policies is a safe way to stow away cash. It also allows you to grow your cash.
This isn’t the case with other options like money market funds, savings accounts, and certificates of deposit.
Financial Flexibility
Older generations can hesitate to create financial instruments that can limit their own use of their money. A family banking plan gives retired family members the freedom to use their money while also making appropriate estate planning moves.
Family Lending
It can be challenging to secure financial funding for large purchases or education.
Many families use policy loans to borrow against life insurance policies. This makes buying a house easier without the restrictive requirements of mortgage lenders.
It’s also a safe way to teach financial responsibility to the younger generations. The money is free to be put to use in creative ways while also maintaining control over it.
Estate Planning
You can use whole life insurance policies to grow and transfer wealth tax-free to heirs. This means that as time goes on, the family’s wealth will grow even more by using financially smart estate planning tactics.
Financial Responsibility
It’s been long proven that when someone doesn’t have experience managing a large amount of money, they quickly lose it all. Because of this, it can be more harmful than helpful to suddenly bequeath a large inheritance onto younger heirs.
A family banking plan ensures that younger generations will have financial stability by teaching them how to talk about money and the value of a long-term wealth strategy.
Consider Your Family Banking Options
If you’re looking for a way to grow your wealth and ensure financial security for your children and their children, then you should consider your family banking options. By using whole life insurance policies, you can secure funding for significant life purchases and overall growth of wealth.
Browse our other articles at ParadigmLife.net on saving and investing to grow your money.
DISCLAIMER: The information provided on InvestmentTotal.com is for general informational purposes only. The content on this website is not intended to be, and should not be construed as, professional financial advice.