Today on The Wealth Secrets Podcast, Sean Adams talks about a daily financial activity that we don’t rarely think about banking. He explains the way that banks make money and how we can use the same insider knowledge to increase our funds. Not only that, but this strategy is often used by the rich to protect generational wealth.

[02:24] How Banks Make Money

[05:18] Banks Only Invest in Safe, Convenient Opportunities

[10:01] There are Better Ways of Storing Money

[12:39] Remove Banks as Middlemen

[14:54] Cash Value Life Insurance

[18:31] The Problem with Traditional Whole Life Insurance

[20:01] Unique Advantages of a Cash Value Life Insurance

How Banks Make Money

Banks make a profit by investing in financial opportunities using the pooled assets of their customers. Typically, banks do not like to take on risk so they rely on safe financial tools that guarantee a stable return. Banks get to keep the returns on their investment while the customers’ deposits are returned in full, along with a small interest.

Banks Only Invest in Safe, Convenient Opportunities

Take a look at any bank’s tier 1 assets from their balance sheets. Tier 1 assets are the funds that are allocated to the highest performing investments. Majority of the banks’ resources are invested in bank-owned life insurance (BOLI). This is because life insurance policies have a guaranteed interest rate of 4-6%.

To recap, banks are earning a 4-6% return from customers’ money but are only returning 0.1% back in the form of interest. And yet, account holders keep coming back to banks for other services like loans or credit cards. A long term savings account only helps banks grow their own profit instead of your own.

Alternative to a Savings Account

It’s been ingrained in us that we need to store our money in banks for safe keeping. But if you think about it, customers don’t reap any benefits aside from the financial services that the bank provides. Banks continue to pool customers’ deposits for their own investment.

Now that we know how banks turn a profit, we can apply the same strategies to our own finances. Think of banks as middlemen. You can take them out of the picture by contacting an insurance company directly. One of the ways you can do this is by setting up a Leveraged Wealth Account that allows you to avail of a cash value life insurance policy.

Book a free life insurance audit at leveraged-life.com. Don’t forget to check out the available learning resources on the website. Do you have questions and feedback? Get in touch with Sean Adams through his email: [email protected].

Connect with Sean:

Facebook: https://www.facebook.com/profile.php?id=100060279543976

LinkedIn: https://www.linkedin.com/in/leveraged-life/

Instagram: https://www.instagram.com/sean_adams103/

Youtube: https://www.youtube.com/channel/UC0i91Q-fFy70LkaFxvfnGpg

All shared information from the Wealth Secrets Podcast should not be taken as legal or financial advice. Please consult with a professional before making any decisions.