Investors: It’s Time To Become The Bank

Jul 2, 2020

It’s time to take more control of your finances and your financial future. It’s time to become the bank.

This is a concept that I really have to credit my 10 year old son with back in the pit of the 2008 crisis. Sometimes, as we grow up, we may talk a good game about what’s possible, but don’t realize how cynical we’ve been programmed to become.

Most people consider me an incredible optimist, yet I still found this concept challenging at first.

Why Become The Bank

At a high level, becoming the bank is all about controlling your finances, the dynamics of your money and investments and having the ability to preserve your wealth.

No matter how much money you put through your checking account or keep in other bank accounts, you really don’t get spared. The manager might take you out to dinner, give you a slightly better interest rate and answer your calls more often. Though, unless you are buying tens of millions of dollars in bulk assets from them, that is about as far as it goes.

The truth is that conventional banking is expensive. Service is worse than non-existent. There is no accountability.

It costs money to keep your money in the bank today. All for the privilege of maybe being able to borrow some of it back after you run through a hellish obstacle course, just for the chance to pay them more fees and interest.

When the clouds of a crisis appear on the horizon, your loyalty means nothing. When you need the help, you can pretty much count on it not being there. Lending and lines of credit get frozen, fees are raised, service is cut back further. There is zero accountability if they fraudulently foreclose on your assets or even steal your identity and open fake accounts in your name. As we saw with COVID-19, they even shuttered branches, websites went down, fees to withdraw your money rose, or they limited how much of your own money you could touch and take back out.

How To Become The Bank

So, how do you change these dynamics and become the bank? Or at least improve the control over your money and future, slash fees that are sapping your returns, and boost gains?

So far cryptocurrencies and digital wallets haven’t proven to be any better. However, you can control more of your money and financial performance by banking on yourself through tools like whole life insurance and self-directed 401ks and IRAs. Look out for our upcoming post on the new rules for these accounts which give you even more flexibility, with all the best tax advantages and no penalties.

So, what do banks do with your money that keeps them in business for decades, despite all of the ups and downs?

One, they buy and build real estate. Two, they make loans on real estate. They put their own money into tangible hard assets that produce income. They use your money to do that too, but then keep 99% of the profits.

If you don’t have $10M, the legal and finance expertise and years it may take to become a nationally chartered bank, then you can use these other types of accounts, and mimic their strategies. Only you get to keep all the profit. You can do this by acquiring income properties, renovating them, or buying mortgage loan notes.

For those that care, the really cool part is that you can choose to deliver great, caring service to everyone involved from your borrowers to tenants to contractors. You can really help people and make money too. That was actually the main driver that convinced me to become the bank.

We probably haven’t even seen the tip of the iceberg of the shift that is coming on the back of the events of 2020. Now is the time to make moves and adjust your portfolio while you can and good deals are still available.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Image by S K from Pixabay