Question for Financial Folks: Infinite Banking

I won't go into everything, but if you know what "Infinite Banking" is, I have a question: Is it really worth it?

See, our financial advisor is pushing it pretty hard, even had Nelson Nash come to pimp it. I've done a ton of research, and frankly, I don't get it. I mean, I completely understand the theory and the practice, but I really don't understand why people would choose it over a decent savings account or a low or 0% loan (while having the cash to pay it off). For example:

Example 1: Using CASH for purchase. $10000 account earning 5%.

I take out the $10000 and make purchase. It is no longer earning 5%. So, after 1 year, I have lost $500 in interest, correct? Well, lets say at the end of the year I put back the $10000 + $500 ($10500). So, it was as if I never took money out in the first place because I added $500 out of my pocket to make up for the lost interest. The opportunity cost of using the money was 5%, but I made it up by "charging myself" 5%. Following? Ok.

-This transaction cost $500 out-of-pocket and I have $10500.

Example 2: Commercial loan. $10000 at 5% interest.

I take a 5% loan from a bank and leave my $10000 in the bank, still earning 5% interest. At the end of the year, I pay off the loan in full for $10000 + an additional out pocket $500. My bank acoount earned $500, but the loan interest cost me $500. The opportunity cost of using this method was 0, but the interest cost of using this money was 5%.

-This transaction cost $500 out-of-pocket and I have $10500.

Example 3 (Infinite Banking): Policy loan for $10000, current loan rate 5%.

I take a 5% loan from my policy and make my $10000 of cash value collateral, still earning 5% interest + dividends. At the end of the year, I pay off the loan in full for $10000 plus an additional out of pocket $500 to free up my collateral. My cash value earned $500, but the loan interest cost me $500. The opportunity cost of using this money was 0, but the interest cost that I needed to pay free up my collateral was 5%.

-This transaction cost $500 out-of-pocket and I have $10500.

So why would I pay all the fees and whatnot for front-loading an IB system when I could do the first two options much easier? I know that IB technically has some tax shelter properties, but I'm thinking the HYOOOOGE fees in the startup kinda kill any tax advantages offered. What am I missing?

Subaru Forester On A TANK RANGE!

As some of you know, back in December I got a Subaru Forester to replace my well-used Mazda Protege. I've always wanted a Subaru, and I really missed the Jeep I had in high-school and college, so I was pretty pumped to get my Forester. I'll post some pics of it later. Anyway, came across this on the Subaru Forester owners forum. Apparently, there's a Fozzie club in the Ukraine that takes their vehicles out to a TANK test range and drives them around!



I want to go to there.

NEWSFLASH! Obama's "Having a great time on vacation"

Our long national nightmare is over! Obama is having a great time on vacation (number 8 this year, I think). And praise allah, he's also eating well!

Kenworth said she’d been asked not to talk about what the Obamas ordered, but “the whole table got lobster tempura with island corn succotash and lemon vinaigrette” in addition to their individual entrees.

Can muslims eat shellfish?

Ba-ZING!

So, To Start Things Off (Again)...ZOMBIES!!!

So, you all know I'm a huge fan of all things zombie, and also a huge fan of all things Frank Darabont (Shawshank Redemption, The Mist), so I was so excited I almost peed when I found out the AMC had hired Mr. Darabont to do television adaptation of the absolutely brilliant "Walking Dead" comic book. This thing looks PERFECT, and if anybody can pull of the atmosphere of despair and hopelessness, it's Frank. Looking forward to this.

Well, um...I'm back?...Yeah, I'm back.

It seems that when you have a child, life kind of gets in the way of "lesser" things. Ergo, blogging "went away for a while". But REJOICE! For The GreatMoose has in fact returned. I don't have much planned at the moment, but I think we'll be OK. So, stay tuned, I've had a thought or two that I may share with you. Hope everybody is well!