How to Be Your Own Bank: Unlocking Financial Freedom

Written by mwealthgroup
Published on January 16, 2024

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If you want to learn how to be your own bank, you’re in the right place!

In a world where traditional banking often limits financial growth, we share a concept that flips the script: Be your own bank. 

Imagine you deposit $5,000 into a traditional bank account. That money doesn't just sit there; the bank uses your funds to provide loans to others, charging them a higher interest rate than what they pay you. Their earnings are significantly higher than what you earn from your deposit.

What if you could replicate this process for your own financial gain? Instead of letting banks leverage your money, you can take control and do it yourself.

This blog will discuss what it could mean to leverage your assets for greater flexibility and freedom. We’ll teach you to use smart money strategies and how to be your own bank!

Remember: Money isn't just for spending; it's a tool for wealth creation. Viewing every financial decision through this lens sets the stage for sustained financial growth.

What does becoming your own bank mean?

The “be your own bank” strategy involves building cash value in a permanent life insurance policy and borrowing against it. 

This approach allows you to use your life insurance as a dynamic financial tool for paying off debts, investing, and accumulating wealth. 

It offers the flexibility to manage investments while benefiting from safe growth rates, tax advantages, and continuous asset appreciation, even when funds are in use.

First, you need to know about the wealth curve

compound interest and the wealth curve

Albert Einstein famously said, "Compound interest is the most powerful force in the universe." 

This principle is the cornerstone of being your own bank. It's about keeping your money constantly working for you, multiplying over time without interruption.

The key to wealth accumulation is uninterrupted compound growth. When you pay cash outright for large purchases, you disrupt this growth. 

The wealth curve allows you to be your own bank. Your money can keep working for you without giving up the interest earned. The pool of money is used as collateral in life insurance borrowing.

It's not just about saving; it's about smart borrowing. For instance, taking a loan against your savings rather than withdrawing keeps your compound interest intact. This strategy ensures your money continues growing, even if you use it for major expenses and investments.

This means you can have your cake and eat it too! You can have your money work for you AND buy income-producing assets simultaneously.

Building and using your “own bank” 

Imagine a scenario where you're not just passively saving money but actively managing it in a way that serves you multiple purposes. This is the essence of being your own bank.

By building a personal fund within a life insurance policy, you can borrow against this policy and pay yourself back. No more handing over interest to the big banks!

This method effectively keeps all financial benefits within your personal economy and ensures your wealth continues to grow.

Here's how it works 

how to use money and keep the earned interest

When you have a cash value life insurance policy, such as whole life insurance, part of your premium contributes to a cash value account that grows over time. You can borrow against this cash value for large purchases, like a car or a home. 

It's a powerful way to maintain liquidity, continue growing your savings, and simultaneously have access to funds when needed. 

This strategy requires careful planning and understanding of the intricacies of life insurance policies, but when executed well, it can be a cornerstone in your journey to financial independence.

Invest in income-producing assets

Investing in assets that generate regular income, such as real estate, is a strategic move in building your personal banking system. 

These assets serve a dual purpose: they appreciate over time, providing long-term value growth, and they produce regular income, which can be reinvested into your fund or used to cover your loan payments.

This strategy aligns seamlessly with making your money work continually for you. For example, rental income from real estate can be substantial enough to pay back any loans taken against your personal bank and contribute further to your wealth pool. This creates a self-sustaining investment, income, and growth cycle.

quote about compound interest albert einstein

Action steps to become your own bank

Now that you understand the “be your own banker” approach let’s go over how you can complete the steps to make it work for you.

  1. Consult With Us: We’re experienced with various types of life insurance policies and can help you set up a plan tailored to your financial goals.
  2. Build Cash Value: Consistently contribute to your policy to grow its cash value, which serves as a foundation for leveraging.
  3. Strategic Borrowing: Use your policy's cash value for major investments or expenses, while you control your repayment schedule. We help ensure this aligns with your overall financial plan.
  4. Invest in Income Producing Assets: Direct borrowed funds into income-generating investments like real estate, creating a cycle of income that supports wealth building.
  5. Repeat: This strategy allows you to take multiple loans which allows the flexibility to keep acquiring other assets. You can use cash flow from those assets to pay back the loan or even when you sell that asset and repeat.

These steps guide you in leveraging life insurance to create a flexible, self-sustained financial system, leading to greater financial independence.


Becoming your own bank isn't just a financial strategy; it's a mindset shift. It's about taking control of your financial future and making your money work for you most efficiently.

Ultimately, the balance between borrowing and investing in other assets is key. Make informed, calculated decisions about borrowing and investing to optimize your financial gain. By applying these principles, you'll be well on your way to becoming your own bank, controlling your financial destiny, and achieving a level of security that traditional banking methods seldom offer.

Ready to take the first step towards financial freedom? Contact M Wealth Group for a free consultation and learn how you can become your own bank.

Book your complimentary financial review!

Ready to change your financial future? Schedule your free consultation with Martin and Chelsea Matthews, owners of M Wealth Group.
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M Wealth Group
M Wealth Group
Together, Martin and Chelsea use their professional expertise and life experiences to provide personalized financial strategies to help clients achieve their goals.
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