Why Austrian Economics will Increase Your Billfold

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Austrian Economics is a school of economic thought that promotes financial control and financial freedom through a market system. Inherently, Austrian Economists believe that any monetary system needs to be backed by a commodity, and that it’s dangerous for any economic system or alternate economic theories to be supported through a system of false credit.

Though Austrian Economics was founded in Europe and has been around since as early as the 19th c., the theory is currently fostered and championed In the United States.

Austrian Economics is one of the few bodies of economic thought that puts their theory into practice with the tangible financial vehicle of life insurance.

Austrian theory for marginal utility

How do Austrian Economists think about the Austrian School?

The Austrian School of Economics is a theoretical framework centered on individualism and the subjective nature of value. It emphasizes the role of individual choices and actions in shaping economic phenomena, rather than the central planning of an economy. Central to its principles is the belief that value is not intrinsic to goods or services but is rather determined subjectively by individuals based on their preferences and circumstances. Critically, it contends that excessive government intervention disrupts these organic market processes.

The Austrian Economic Theory and the Infinite Banking Concept

The Infinite Banking Concept is the idea that you are both the banker and borrower, and your “bank” is your Whole Life Insurance Policy. When you wear both hats as banker and borrower while using your whole life insurance policy, you are able to earn a rate of return on your original policy while simultaneously borrowing against yourself with tax-advantages and earned interest.

This strategy is called Infinite Banking. Infinite Banking is perfect for a Whole Life Policy because, as the name suggests, you can pass your “bank” down to your beneficiaries, and they then can Infinitely Bank.

austrian theory versus keynesian economics

The Austrian Economic School Meets Infinite Banking

The Infinite Banking Concept (IBC) aligns with certain Austrian economic principles, particularly regarding individual empowerment and financial autonomy. IBC centers around using a specially structured life insurance policy as a financial tool. Austrian economics, known for its emphasis on individual decision-making and skepticism toward centralized control, resonates with IBC’s focus on personal financial control and self-reliance.

In Austrian economics, the importance of individual choices in economic decision-making is paramount. Similarly, the IBC emphasizes the individual’s ability to create a personal banking system by leveraging a life insurance policy’s cash value. This concept allows individuals to grow their wealth, access cash for various needs, and potentially bypass traditional banking systems. Both Austrian economics and IBC emphasize the importance of decentralized control and self-directed financial strategies.

market prices, money supply, and market forces are important economic laws in austrian economics

Progress and A Better Chance at Abundance  

Considering our economy is based upon fractional reserve lending and our currency is backed, not by gold, but by the Federal Reserve’s judgement, it’s no surprise how many of us get shackled by debt. Everything is based on credit with an interest rate.

In this modern time, most of us need a car, a home, and an education. So, we give away our time and effort to promising lenders that we will pay them back in ‘x’ amount of years with ‘x’ amount of interest.

It’s the interest rates that kills our pocket book. We end up paying thousands of extra dollars to the bankers in lending fees.

This lack of financial control is what stifles our financial freedom. It also prevents an individual from taking advantage of the opportunity cost of money.

Financial Control = Financial Freedom

By choosing to eliminate lending institutions from your financial picture, you are able to gain control of your financial life. Infinite Banking makes that possible because you are earning the interest rates on whatever you borrowed, which would have otherwise gone to a bank.

This opportunity cost helps build your personal wealth, instead of building the bank’s wealth.

The austrian macroeconomic theory emphasizes private property, a complex economy, and is a central part of modern economies

Infinite Banking and Whole Life Insurance

The Infinite Banking Concept can be used with many different vehicles, but it is best used with Whole Life Insurance. Life Insurance is one of the safest and longest running industries, as it’s been around for thousands of years. (A Glance at the History of Life Insurance) Life Insurance companies were among the few industries that paid dividends during The Great Depression.

To Infinitely Bank with Whole Life Insurance is a secure way to build lasting wealth. Besides the death benefit that naturally accompanies Whole Life Insurance, a policy owner receives ample living benefits like tax-advantages, income during retirement, and guaranteed growth.

The Austrian School of Thought and the Infinite Banking Concept is what helps an individual gain control over one’s personal economy. When there is financial control, there is financial freedom.

Read: Austrian Economics: For a Failing Economy

Watch: Preparing for Your Complete Retirement Journey

Listen: Concerning the American Financial System

Listen: Austrian Economics Podcast


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