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What is this IBC?

Updated: Feb 11, 2023

“There are only two sources of income—people at work and money at work.”

-Nelson Nash

Your wealth has to reside somewhere. Whether it’s $100 or $1,000,000…whether it’s under your mattress, in a bank, or investing in the stock market, it has to be somewhere. For most of us, we choose to put most of our liquid assets into a traditional bank.

Banking goes back to ancient times. Coins were heavy and cumbersome to carry around everywhere, and ancient homes didn’t have safes, so for security and convenience, people would store their gold coins in a localized place. The first banks were actually in temples! People figured the priests were honest, and they were there 24/7. That’s one of the reasons the temples were always ransacked during times of war.

Over time, the first stand-alone banks evolved, and people would take their gold coins there. The bankers figured out that people hardly ever wanted all of their coins back at once, so they started loaning them out to others, at interest, to make a profit. So began a process we know of today as “fractional reserve banking.” Modern day banks are only required to keep a paltry 10% in reserve! That means that the $1000 dollars you deposit in your account might be loaned out numerous times, each time earning the bank interest of 3, 10, 15% or much higher. And what do you get out of the deal? How does a free checking account sound? This is why a “run on the bank” is a big deal (remember George Bailey in It’s a Wonderful Life?). The bank doesn’t actually have all your money all the time. It’s spread out all over other people’s loans.

The average interest rate of a savings account right now is .05% (a CD is slightly higher at .24%). On $10,000 that means you make $50 a year. Banks lend that out (10 times over) for a mortgage at 3%--and they make $3,000 in that same time period, which is 60 times more than they’re paying you! Those profits go back to the bank owners. I’m not saying that’s wrong or immoral. I’m just saying that’s the system. Perhaps there’s a better one, designed with YOUR best interest in mind.

Insurance companies, on the other hand, are much more strictly regulated. They are required to keep 100% in reserve at all times to meet all of their contractual obligations. This means they can’t take chances on bad loans or risky investments. The put your money to work as well so that they are able to pay out when someone dies or becomes ill, but as a policy holder in a mutual insurance company, when the profits come back and are divided up at the end of the year, guess who gets a cut? YOU do! By very definition, as a policy holder, YOU are a part owner in the company. These dividends are not guaranteed, but have been paid out every year for over 100 years. That means through world wars, depressions, recessions, and pandemics, dividends were still paid.

So…what if. What if we could move our “bank”, or our storehouse of money, to a place that was more favorable to us as individuals? What if we took back control of the banking function in our lives and cut out the middle man? This is what becoming your own banker is all about.

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