Why MUST I Build Capital with the Infinite Banking Concept? Because of Kaye Lynn Peterson for help fixing my tragic attempt at proofreading. Nelson Nash refers to the Human Factors in his book Becoming Your Own Banker. One of these is The Golden Rule – he who has the yellow metal makes the guidelines. An apparent play on words Nash’s version of the Golden Rule contains a valuable kernel of truth: those with control over financial value determine the way things happen. Which should feel to you. After all, in economics, we say that money literally has purchasing power -, the charged capacity to purchase.
From a more abstract point of view, money is a claim to the organization of resources in the global world. While a lone human being can’t construct a 2,500 square foot home in three months’ time, he can lead it to be built by transferring money simply, by paying the purchase price. Money is the main element to leveraging the creative dreams and wishes in an individual’s mind and manifesting them into living. But wouldn’t you believe that if it was so obvious, that folks – especially the financial advisory community – would offer ideas about how to keep maximum control over money?
I suggest, if money is so necessary for man to affect real change, to impose his will in the real physical world, why doesn’t the financial advisory community talk to us about any of it? Where are all the strategies to acquire, protect, develop, and use money? The main one use for the money we listen to about in the financial advisory community is trading.
To be clear, this is actually the contrary of what I’m discussing as it pertains to accumulating money that you truly intend to use. As I argued to the regular membership of the Nelson Nash Institute at the 2019 Think Tank Symposium, fifty percent of the essential idea of trading is to giving up control over money. The other half is the motive – to generate a monetary return. But you can’t have the next half without the first.
You’ve got to quit control of money to whoever handles the investment so that guy or gal can go put it to work and get you your come back. The subject which we hardly get any advice is how to best control and gather financial value. So when I talk about financial value, I don’t mean money or the value in the savings account just. I’m talking about capital – the financial value of the property, after accounting for just about any liens, that you intend to use to obtain other property.
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This certainly can be the value of your bank checking account. 5,000 in the safe in your cellar that you want to use to buy a motorcycle on Craigslist, that’s capital. 5,000) of property (the physical Federal Reserve Notes – the cash) that you intend to use (spend) to buy other property (the motorbike). Frankly, capital is the neglected step-child of modern finance. It type of “comes with,” but is never sought out.
Sometimes someone might do something interesting with capital, and everyone thinks it’s neat and interesting when it happens, but like always, we begin to your investment step-child. After all, capital isn’t why you got involved in the first place. You bought the home to live in it. You began the continuing business to increase your income. You bought the gold, silver, and bitcoin to buy low and sell high. Capital (the financial value of ownership) is the side-benefit, and similar to the side-child, it may become a side-problem.
If the housing market goes against you, you may go ugly on your home. The banker’s valuation of your business is never what you think it should be. The price tag on gold, silver, and bitcoin can fall certainly. In those cases, your capital, your equity, is negative – you paid in more than the asset is currently worth – and now you’re annoyed. If the financial step-child is acting up, you might be worse than irritated. You may be in danger of foreclosures.
The bank or investment company might be near to seizing your equipment. Your wife might exile you to the couch for buying a lot cryptocurrency before you learned that the crypto-exchange operation was a huge Ponzi scheme from the get-go. And like that just, the financial step-child ruined and went through what must have been a great thing.
We don’t value capital until just how neglectfully we’ve treated it becomes apparent. Rather than treating capital like the foundation of incredible financial prosperity and opportunity, like the perfect solution is to major, systematic problems in the individual and business owner’s funds, it is treated by us with severe disregard. In Becoming Your Own Banker, Nelson Nash tells a whole story about Panasonic. Panasonic executives wished to create a plant in Mexico.