Credit Union vs Bank Things to Consider

While we promote use of specially designed life insurance as a warehouse of wealth for you money, this doesn’t mean you would entirely give up the institution of banking. Banks and credit unions are still needed to transact daily business like checking and deposits as well as the convenience of things like savings accounts, ATM and credit cards. We believe the bulk of your emergency / opportunity money should be stored in life insurance companies it just makes sense to keep some of your monthly needs in a checking or savings account at a local bank or credit union.

If you are not sure of the difference between a bank or credit union check out the article below.

When we talk about doing business without banks, we are primarily talking about loans for vehicles, equipment, vacations, education and other long term needs. We consider using a bank or credit union for the task of convenience.


Are you trying to decide between using a credit union or a bank?  If so, there are a number of things you should know about both banks and credit unions.  This list of facts will help you weigh your options.

What is a Credit Union?

A credit union is a financial cooperation that is member-owned.  It is controlled democratically by its members as well.  The mission of a credit union is, generally, to operate economically so the members can reap the benefits of having less expensive financial services and so credit can be provided at competitive rates.

How Does a Bank Differ From a Credit Union?

Banks are financial institutions that are owned by investors.  The investors are oftentimes a myriad of stockholders or, they can be a lower scale group of large investors.  There are both national and state banks.  

Similarities between a Credit Union and a Bank

Both credit unions and banks offer the basic things you would need in a financial establishment.  They have:

  •         Checking accounts (personal and business)
  •         Savings accounts
  •         Auto loans
  •         Home loans
  •         Refinancing of home loans
  •         Money market accounts
  •         Certificates of deposits
  •         Online banking

What are the Pros and Cons of a Credit Union vs. a Bank?

There are both pros and cons to both credit unions and banks.  Here are some of them:

Credit Union Pros

  •         Offer better deals
  •         Don’t try to maximize profits at the expense of the customer
  •         Pay more interest in savings and CDs
  •         Low loan rates
  •         Free checking
  •         Money is insured

Bank Pros

  •         Community banks often offer pros of credit unions listed above
  •         Easily accessible
  •         Most offer specialized services such as trust funds
  •         Money is insured

Credit Union Cons

  •         Not all credit unions adhere to the pros mentioned above
  •         Receive tax breaks that are not necessarily passed back to members
  •         May require eligibility
  •         Specialty services may not be available

Bank Cons

  •         Customer benefits are not as good as credit unions
  •         Higher interest rates
  •         Maximize profits
  •         Customer service is not as personal as credit unions

How Do I Qualify for a Credit Union?

Credit unions are set up to where there is something the members have in common.  To find one you qualify for, you may have to do a little searching, but chances are good you’ll find one somewhere.  Here are some of the circles credit unions are offered in:

  •         School
  •         Church
  •         Geographical area
  •         Being related to a member
  •         Organization membership

How Does it All Add Up?

Which is best, a credit union or a bank?  Much depends upon what you want or need from a financial institution.  If you are looking for an establishment for complicated, unique matters such as trust funds, etc., you may have better luck at a bank.  If you are hoping to get some discounts and take advantage of lower interest rates, a credit union might suit you well.  Finding information online or personally visiting a branch is the best way to find out.


Whole Life Insurance is a Bad Investment part 2

In our last post on Why Whole Life Insurance Is a Bad Investment we talked about diversification. In today’s are article we will discuss:

Reason #2: Whole life returns are not guaranteed.

People for some reason continue to compare stock market returns and returns in Whole Life Insurance when they are not even in the same category. Whole Life Insurance should be compared to conservative savings like Bank Savings, Certificates of Deposit (CDs), Money Market Accounts, US Government Bonds, etc. When doing this type of comparison you will note that Whole Life Insurance Contracts do have a guaranteed rate of return. When you look at an illustration the left hand side clears states guaranteed. Dividends are not guaranteed and are a result of the profits of the company minus expenses. In a mutual whole life company, what is guaranteed is that profits must be distributed to policy holders. Once a dividend is credited it can never be taken away is also guaranteed.

Again, Whole Life Insurance is not an investment but a place to store money for future use that does provide a guaranteed rate of return plus a death benefit as well as a host of other attributes. Your money grows tax deferred, you are paying premiums with after tax dollars, the money grows and if utilized correctly can be taken tax free.  Secondly utilizing certain riders, a whole life policy can provide other living benefits like Disability Protection, long term care, Cash Value Protected from Creditors, Ability to borrow against your cash value for purchases and other investments.

A properly designed whole life insurance contract that follows the guidelines of the Infinite Banking Concept as outlined in the book “Becoming Your Own Banker” is considered one of the best ways to build Long Term wealth over ones life and for multiple generations. Many financial entertainers that have no fiduciary write articles on websites and blogs continue to bash this concept  without ever properly understanding how money works or understanding how much tax and one pays over their lifetime.

The Infinite Banking Concept works without even using a whole life insurance contact. One could become their own banker by using HELOCs, Bank CDs for collateral, or margin loans from a brokerage account. The key when thinking about using a whole life insurance contract for Infinite Banking purposes is the guarantees, the history of safety and security of your wealth and the ease of access to your money when needed.

Learn more about the Infinite Banking Concept purchase the book Becoming Your Own Banker.

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Is there a financial storm on the horizon?


Watch the Video, “How to Weather the Coming Financial Storms” Below

Many experts are warning that there could be a bad financial crash coming in the near future. Understanding the Austrian theory of the business cycle is critical for long term wealth preservation. According to Austrian Economics the cycle starts out as an asset bubble is pumped up, as investors start pulling out of those assets the bubble deflates more rapidly than the time it took to rise. This has happened numerous times over the years. In the past to help settle the markets the Federal Reserve and other central banks around the world would reduce interest rates and inflate the money supply, causing a stimulus. In the past interest rates have been in the historical area of 5-8%. Today we are in a new landscape with interest rates around the world at historical lows. Some countries are even posting negative interest rates.

We feel that unlike any other time in history there is not much the central bankers can do if we do have another crash like what happened in 2000 or 2008. The historical business cycle is between 6-8 years. We are overdue for a downturn in the economy.

We began studying these principles in 2007 during the last financial crash. This is how we came to find The Infinite Banking Concept back in 2013. Since discovering IBC and learning what it has done for our family we decided this cannot be kept a secret any longer. Which is why we have partnered with the Nelson Nash Institute (formerly known as the Infinite Banking Institute) to help spread the message of IBC.

Recently Robert P. Murphy Ph.D. economist and Carlos Lara a business expert gave a 1 hour webinar on implementing a strategy that will help protect your family wealth when the next financial storm blows in.

We are Authorized Infinite Banking Practitioners and would like to show you how this safe and effective wealth strategy can be implemented in your personal family or business. Our team of trained agents are available to answer your questions. Give us a call 931-546-9338 or use the contact page to send us a message.

To learn more order a copy of “Becoming Your Own Banker, Unlock the Infinite Banking Concept” by R. Nelson Nash

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Whole Life Insurance is a Bad Investment part 1

Part 1 of 8, in response to the blog post “Why Whole Life Insurance Is a Bad Investment.”

In this series, we will dissect the commonly held misconceptions that exist around the idea that a properly structured whole life insurance policy can be used to create your own private family bank, aka the Infinite Banking process.

Reason #1: Whole Life Insurance is undiversified and therefore a bad investment

We continue to come across articles shared with us by clients that espouse why Whole Life Insurance is a such a bad investment. Many in the financial industry have this view and state as much. Even entertainment personalities like Dave Ramsey and Suzie Orman poo-poo whole life.

After the 2008 crash and subsequent “Great Recession,” many people should have figured out that many “investments” are undiversified. The entire stock market went down 40% or more. Wouldn’t the stock market in general be considered an undiversified investment? The entire housing market went down in the collapse, no area was spared. Again, any investment area that moves as one could be looked at as being undiversified.

During this time, anyone who had their money in one of the Life Insurance companies that we work with did not lose a single dime. As a matter of fact, they enjoyed a 6+% dividend for those years.

It’s important to keep in mind that life insurance companies are masters at managing risk. There are whole departments within insurance companies whose entire job is to calculate risk. These masters of risk assessment are called Actuaries.

An actuary is a business professional who analyzes the financial consequences of risk. Actuaries use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs.

Life insurance companies have their own investment portfolio that is also diversified. Insurance companies investments are inherently conservative, many of these investments are diversified in low risk investments like bonds (government, municipal, corporate), real estate holdings, secured loans to financial institutions and other investments. Life insurance themselves could be considered diversified.

The financial strength of life insurance companies is continually assessed by independent third-parties.  Life insurances companies hold ratings from four independent agencies—A.M. Best, Fitch, Moody’s and Standard & Poor’s— who rate the financial strength of insurance companies. These rating companies are charged with understanding the financial strength and safety of an insurance company.

Life insurance companies are also regulated by each state. The National Association of Insurance Commissioners (NAIC) serves as a vehicle for individual state regulators to coordinate their activities and share resources. Established in 1871, the NAIC functions as an advisory body and service provider for state insurance departments. The fundamental reason for government regulation of insurance is to protect American consumers. State systems are accessible and accountable to the public and sensitive to local social and economic conditions. State regulation has proven that it effectively protects consumers and ensures that promises made by insurers are kept.

Using a properly structured Infinite Banking policy, clients can use their own private bank to fund their other investments for maximum gains. While Whole Life is not an investment, it is a safe place to park your money and one that enjoys many financial benefits.

We consider the Infinite Banking Concept to be a “Super” emergency fund. While folks like Dave Ramsey talk about a thousand dollar emergency fund, or perhaps having 3-6 months of expenses set aside, we have found that the larger the emergency fund the smaller the emergency. What’s wrong with an emergency fund with 1-2 years of expenses?  You can accomplish this using Infinite Banking.

As they say “Cash is King,” and when you have the ability to use your bank to make purchases you can negotiate better deals. This can be done with automobiles, real estate and investment properties, and even businesses that are for sale.

Lastly, finance is 90% mental (or something like that). Basically, to get financially ahead you need to learn to live on less than you make. Then, after you do that, you put your money to work to help you earn even more money. Many people use “other people’s money.”  This means going to a bank and borrowing.  When you use other people’s money, you lose 100% control in the process. The bank makes the terms of the loans and if you miss even one payment you are subject to extra penalties, higher interest, dinged credit or even worse, repossession and foreclosure. When you are the bank, you make the terms.  You have control and flexibility and you do not have to worry about repossession or foreclosure. If you are your own bank and are unable to make your car payment due to a job loss or some other financial reason, you can do that! Try that with your car note or your house payment financed through the typical lending institution.

In closing, someone who claims that life insurance is a bad investment is correct since life insurance in of itself is not actually an investment. Further to say that life insurance is not diversified is also wrong when compared to the numerous other places someone could put their money.

Get the book, Becoming Your Own Banker, and learn how you can create your own Private Reserve Account.

Next up  “Reason #2: Whole Life returns are not guaranteed”