The words “passive income” are getting thrown around a lot lately, especially with how the economy is.
However, many of those tips can be a waste of time.
But can you create passive income with self-banking? And can self-banking be something you can rely on for your financial future?
In this article, we will talk about passive income, self-banking, and our personal favorite, lifestyle banking.

What Is Passive Income?
Simply put, passive income means earning funds without much effort.
For example, passive income can come from rental properties, dividends, interest, and other similar things. Still, it can also come from owning a business where you don’t do any active work.
Many ways to make passive income require a lot of time and funding up front, but after a while, the owner can get paid without doing much.
According to the IRS, passive income is still taxed as regular income, but that can also depend on its type.
Can Income Really Be Passive?
Well, not really. You must invest time or funds to see results whenever you want to earn more.
For example, investing in stocks or savings still takes discipline, work, and knowledge of current times.
However, it’s still way more manageable than spending eight hours a day sitting at your corporate job. And you get to earn it for yourself, not somebody else!

Types of Passive Income With Self Banking
There are different ways to create passive income through self-banking and investing. However, remember that you need capital to start all of these, some less than others.
High Yield Savings Bank Account
Using a high-yield savings account takes time to make you rich, but it’s still an excellent way to save.
You need to open a high-yield savings account, put your savings into it, and watch it earn an interest rate. It’s slow but good.
Peer to Peer Lending
There are several websites online where you can give loans to people, set up an interest rate, and they’ll pay you back. The interest rates for these loans can sometimes be over 5%.
These loans are an alternative for many people who can’t get a traditional loan from their bank or want to ensure their credit score is good.
This option can be very risky because there’s a possibility that someone won’t pay you back. That’s also why it’s always advised to only do peer-to-peer lending with smaller amounts.
Investing in Stocks and Bonds
Investing can make you rich quickly. But it can also be dangerous.
You can invest in dividend stocks, dividend index funds, ETFs, or bonds. These are the safest options for those new to investing, and they could have good payouts.
Be careful of what you invest in and how much you spend on it. Picking individual stocks can be a gamble if you’re unsure of what you’re doing.
And keep in mind that nothing is guaranteed and that it’s important to stay financially responsible.

Rental Property
If you’re looking for a more long-term solution, you can invest in real estate.
Real estate definitely requires more time, funding, and effort than others.
You’ll need to buy the property, find tenants, and worry about maintenance and all the other problems.
Both long-term rentals and short-term ones are good options. You can also just rent a room in your house, a parking spot, or even a garage if you don’t use it.
The Infinite Banking Concept
Another way you can create passive income for your future is by using the infinite banking concept.
As you’ll see next, infinite banking is a concept in which you use your life insurance policy to create an endless banking system.
Implementing this financial strategy is how we got out of $120,000 of credit card debt, and it helps us live the lifestyle we want today. When you become your own bank, a whole world of new opportunities opens up.
You can use the infinite banking concept to pay your bills, pay your rent, or invest in rental properties. There are infinite opportunities.
And you can continue to make money from it even when you pay for things!
We call it Lifestyle Banking and recommend it to everyone wanting to build a safe financial future.
Let’s take a more in-depth look at it.

What Is the Infinite Banking Concept?
To put it simply, infinite banking works by using your whole life insurance policy to become your own banker.
Coined in the 1980s by the late Nelson Nash, the infinite banking concept lets you create a system to borrow money from yourself, pay yourself back, and let the funds grow. It is supposed to be a substitute for traditional banks, with a lot of advantages.
Here’s how it works.
How Does the Infinite Banking Concept Work?
The main component of the infinite banking concept is a whole life insurance policy.
When you pay your premiums for the whole life insurance policy, the funds go toward fees, the death benefit, and cash value.
This cash value part of your life policy is what you need for the infinite banking concept to work.
When you take out a policy loan against the cash value, you can repay yourself with interest at your own pace. Those funds also grow because you’re not giving them to a bank or another loaner. Thus, you become your own banker.
You can use these policy loans for anything, from bills to education and debt payments. And it’s way easier to get these loans than it is to get just one traditional loan.
Whole life insurance comes with guaranteed growth and potential dividends, which further helps you build your finances. Guaranteed growth means that the funds in the cash value will keep growing even when you take out a loan to spend on your investments.
Finally, the concept of infinite banking doesn’t work as well with other permanent life insurance policies or with term life insurance. The only life insurance products this concept can work with are well-designed whole life insurance policies.
Besides creating cash flow, this financial strategy also comes with other advantages. You’ll get a death benefit from your whole life insurance policy, and the funds in the cash value have tax advantages and are usually covered by asset protection.

How to Create Passive Income With the Infinite Banking Concept
Don’t worry. We’re not all talk.
Here are the steps you need to take to build wealth with infinite banking.
It’s All About the Mindset
The first and most important thing you need to get ready if you want to create income with infinite banking is to build your money mindset.
A lot of people have a terrible relationship with finances. They don’t know how to make it work for them; they think they don’t have enough of it, and they’re scared overall.
Or they spend too much of it and let their actions erode their wealth.
If this is you, you need to realize one thing. Money is supposed to serve you, not the other way around.
So if you feel any anxiety about your finances, it’s time to rebuild your mindset.
Look at your funds as a tool to create the lifestyle you want to live, not as something that controls you. Accept responsibility, say goodbye to past mistakes, and prepare to get on the road to financial freedom.
This is tough and can take years, which is why you’d like to start now.
You have to be deliberate in everything you do. Analyze how you feel about finances, and the next time you catch yourself having a negative money mindset, correct the way you think and take the next step.

Analyze Your Finances
Now that you’ve opened your mind to new opportunities, it’s time to analyze your finances.
Take some time to look at your finances and your expenses. Pick apart your financial habits and consider whether these expenses serve you.
It’s easy to get carried away with spending when you don’t have a clear picture of your finances. But when you know what you’re doing and why you’re doing it, it’s so much easier to build a plan that suits you, and that helps you build your financial freedom.
Look at what you spend most on and determine what you can live without. Sometimes we must eliminate some things to make space for new, better ones.
Also, determine which part of your expenses you could turn into an investment. Stay tuned for more information about this.

Start Lifestyle Banking
If you don’t already have a whole life insurance policy set up, it’s time to do just that.
Lifestyle Banking works best with this permanent life insurance policy and is the best way to create income. It could also work with an index universal life policy, but not as well as it does with a whole life insurance policy.
The first step you need to take is to do your research and analyze your finances. See which life insurance companies operate near you and figure out whether they suit you.
Now you need to pick an agent and life insurance company you want to work with and design a policy that will suit you the best and help get this concept to work. At Wealth Nation, we specialize in designing whole life insurance policies for Lifestyle Banking, so feel free to reach out if you decide to get a policy.
Next up in this strategy is funding. Remember that it takes time to build up your policy’s cash value, even with riders that help with this. The cash value is where you’ll borrow from, and you’ll build it up with premiums.
Lifestyle Banking is a long-term game involving a good financial mindset, funding, and a lot of discipline.
After a while, you can take out the first policy loan, set up the repayment schedule and interest rates yourself, and let the funds grow at the guaranteed rate!
Example: Make Money From Your Bills
A big part of a healthy financial mindset is realizing that everything can be an investment. Yes, even your bills can become assets.
Here’s our example of how to make money from your bills with the help of Lifestyle Banking.
Let’s take a look at your bills quarterly.
Let’s say you spend $400 on utilities every month. This means that in three months, your bills will amount to $1200.
All that money has been given away and is not returning to you. But what if we told you that you could view your bills as an investment?
With Lifestyle Banking, you take out a policy loan. This is precisely what you’re going to do.
Take out a loan for $1,200 and set up your payments with an interest rate. At the end of the quarter, you’ll have more money in your account than you started with, and all of those funds will grow at the guaranteed interest rate.
And this is just a small example. There are plenty of ways to use Lifestyle Banking to make money from everyday things like mortgages, debt payments, and education.
You don’t need to say goodbye to your money forever!
Want to Know More?
Passive income seems simple at first, but it can take a lot of initial money, time, and effort. Also, some options for gaining passive income aren’t the safest if you’re not in a good financial situation.
But Lifestyle Banking doesn’t come with that risk.
You just need an overfunded life insurance policy, cash for premiums, and discipline, and you can reach financial freedom.
Do you want to know more?
Watch our free masterclass! You’ll learn everything you need to know about personal banking, and how to use your whole-life insurance policy for infinite opportunities.
It’s time to become your own bank!