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