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I’ve been helping people understand how to become their own banker for years now. It’s one of those concepts that sounds almost too good to be true, until you see how it actually works.
When people talk about “becoming your own banker,” they’re actually talking about two completely different strategies. And the one you choose can make all the difference in whether you succeed or end up frustrated and financially worse off.
Let me explain what I mean.
Every week, I get calls from people who say things like “Tom, I want to become my own banker” or “I heard about this infinite banking thing, can you help me?”
Upon closer examination, we find some people are thinking Infinite Banking – using whole life insurance as a personal banking system. While others are thinking Velocity Banking – using lines of credit to accelerate debt payoff.
Now, both Infinite Banking and Velocity Banking can help you take control of your finances. Both can help you stop relying on traditional banks. But they work in completely different ways and solve different problems.
Choosing the wrong one for your situation? That’s a mistake that can cost you years of financial progress.
When Nelson Nash wrote “Becoming Your Own Banker“, he was talking about something very specific. He discovered that you could use specially designed whole life insurance policies to create your own personal banking system.
We’re talking about policies designed to maximize cash value growth while keeping the death benefit as low as possible. The goal is to build a pool of money you can access through policy loans while it continues growing.
Here’s how it works in real life:
You pay premiums into a participating whole life policy. Most of that money goes into paid-up additions rather than the base policy. This builds cash value fast without triggering tax problems.
When you need money – for a car, home improvement, business opportunity, whatever – you borrow against your cash value. The beautiful part? Your full cash value keeps earning guaranteed interest and dividends while you’re using the borrowed money elsewhere.
It’s like having your cake and eating it too. Money working for you in two places at once.
Now, velocity banking is something entirely different. It’s not about building a long-term asset. It’s about using lines of credit strategically to eliminate debt faster than you thought possible.
Here’s the basic idea: You use a HELOC or personal line of credit as your primary checking account. All your income goes in, immediately reducing the balance. You use credit cards for monthly expenses to keep cash in the line of credit as long as possible. Then you make big chunks of principal payments against your target debts.
Say you have $25,000 in credit card debt at 18% interest. With minimum payments, you’ll be paying that off for decades. But if you use a $30,000 HELOC at 7% to pay off those cards immediately, then apply the disciplined cash flow management, you can have the HELOC paid off in a couple years instead. The key is discipline.
I’ve seen too many people get excited about becoming their own banker, choose the wrong strategy for their situation, and end up disappointed.
The truth is, both strategies can work. But they serve different purposes.
If you’re drowning in high-interest debt, velocity banking might get you to financial freedom faster. If you’re looking to build long-term wealth with tax advantages, infinite banking could be your answer.
And here’s something most people don’t realize: you can use both.
A Story That Shows the Difference
Let me tell you about Mike and Sarah. Mike and Sarah are two individuals, who are both professionals, each making $120,000 per year.
Mike had $50,000 in various debts – credit cards, car loans, the whole deal. He was paying over $1,200 per month just in minimum payments. For Mike, velocity banking made sense. Using his home equity strategically Mike was able to eliminate his toxic debt. Within three years, he was debt-free and had an extra $1,200 per month in cash flow.
Sarah, on the other hand, had her debts under control but wanted to build wealth for retirement and protect her family. She started with $18,000 annually in a properly designed whole life policy. Five years later, she has over $75,000 in accessible cash value, plus a growing death benefit for her family.
Both became their own bankers. But they used different strategies to get there.
Neither strategy is a magic bullet, and both require something most people struggle with: financial discipline.
With infinite banking, you’re making a long-term commitment. You need to be able to pay premiums consistently, even when times get tough. And if the policy isn’t designed correctly from the start, you could end up with an expensive disappointment instead of a powerful financial tool.
With velocity banking, the discipline requirements are different but just as demanding. You need to manage your cash flow like a business. You need to resist the temptation to run up new debt. One mistake – like losing your income or overspending – and you could end up worse than when you started.
If you frequently overdraw your checking account, miss payments, or struggle with impulse purchases, focus on basic budgeting first. Here’s a resource that will help you.
That depends on your situation. Here’s how I help people decide:
You might be a good fit for infinite banking if:
You might be a good fit for velocity banking if:
Here’s the important part: you don’t have to choose forever.
The most powerful approach is often using both strategies in sequence. Use velocity banking to eliminate debt fast, then redirect that freed-up cash flow into infinite banking for long-term wealth building.
Here’s how that could look: After using velocity banking to eliminate his $1,200 monthly debt payments, Mike redirects the $1,200/month into building his personal banking system through participating whole life insurance. Now he has both…no debt AND a growing pool of accessible capital.
That’s real financial freedom.
I’ve been helping people with this for years. I’ve seen what works and what doesn’t. Becoming your own banker is possible, but you need to understand what you’re actually trying to accomplish.
Are you trying to get out of debt? Are you trying to build wealth? Are you trying to do both?
The answer to that question determines which path makes sense for your situation.
At McFie Insurance, we help people figure this out every day. We look at your specific situation – your income, your debts, your goals, your family situation – and help you determine which approach makes sense. There’s no universal “best” strategy. There’s only the best strategy for YOU.
If you’re serious about taking control of your financial future, the first step is understanding your options. Then you can make an informed decision that’s comfortable, affordable, and profitable for your situation.
We don’t require you to buy anything from us. We just want to make sure you have all the information you need to make the right choice. At the end of the day, that’s what becoming your own banker is really about: having the knowledge and tools to make financial decisions that serve your best interests, not someone else’s.
That’s real financial freedom. And it’s available to you, no matter which path you choose to get there.
Tomas P. McFie DC PhD
Tom McFie is the founder of McFie Insurance and co-host of the WealthTalks podcast which helps people keep more of the money they make, so they can have financial peace of mind. He has reviewed 1000s of whole life insurance policies and has practiced the Infinite Banking Concept for nearly 20 years, making him one of the foremost experts on achieving financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.
This free binder has the information to build your own Infinite Banking system.
