Peripatetics

Peripatetics

If you've ever studied Aristotle, you may know that he used to walk with his students while discussing philosophy. They called themselves the Peripatetics. Aristotle believed that some of the best thinking happened while people were moving, not sitting.

That's always reminded me of Calvin and Hobbes. Calvin is constantly wandering around the woods or flying down a hill on a sled while expounding on some deep philosophical topic. There's even a comic where he wonders whether he and Hobbes are just a pair of "pathetic peripatetics." The author is always making nods to other famous philosophers and authors, and those themes are definitely an intentional nod to Aristotle. Just another great aspect that makes Calvin and Hobbes the greatest comic ever!

Well, today I went for a walk and started thinking about life insurance. Not life insurance as most people think about it. Not premiums. Not death benefits. Not all the usual sales pitches.

I started thinking about what a life insurance company actually is. And the more I thought about it, the more I realized that most people have no idea — just like me before I learned about infinite banking.

What Is a Life Insurance Company?

A life insurance company is a financing company. That's it. A life insurance company is a company that stores wealth, buys wealth, and sells wealth. It has assets. It has liabilities. It has cash flow. It has risk. It has an income statement and a balance sheet.

In other words, it's a financial institution.

The only reason people struggle with that idea is because we've been conditioned to think about life insurance almost exclusively through the lens of death. But that isn't the whole picture.

Not even close.

When someone contributes capital to a mutual life insurance company, they're exchanging one asset for another. They're giving money to the company, and in return they're receiving a contract. That contract has a present value and a future value. The present value is the cash value. The future value is the death benefit.

Every time a premium is paid, both of those values increase. Yet most people spend their entire lives looking at only one half of that equation.

Why We Tend to Miss the Point

If I say the words "life insurance" to the average American, what comes to mind?

Usually they think of an expense.

A bill.

Something they hope their family never has to use for a very long time. That's understandable. It's also incomplete. One of the great contributions of Nelson Nash and the Infinite Banking Concept is that he encouraged people to stop looking at life insurance only through the lens of death and start looking at it through the lens of finance.

Because whether you realize it or not, every single person on earth has a financing problem. Everybody has to store wealth somewhere. Everybody has to access capital. Everybody has to buy and sell money. And yes, I said buy and sell money.

You Finance Everything You Buy

This is one of the most important concepts I can share with someone. You finance everything.

Every single thing. You cannot buy anything without first financing it. Before you can buy a car, you have to acquire the money that buys the car. Before you can buy groceries, you have to acquire the money that buys the groceries. Before you can buy a house, you have to acquire the money that buys the house. In other words, before you buy the thing, you have to buy the money.

That's financing.

You either buy the money from someone else and pay them interest. Or you buy the money from yourself and give up the interest and growth that money could have earned elsewhere. Those are your choices. There is no third option.

There are no exceptions.

The laws of finance work whether we acknowledge them or not. If you'd like to see how this plays out in a real financial plan, schedule a call with us.

What a Bank Actually Does

A bank is a company that buys and sells money.

When you deposit money into a bank, you're selling that money to them.

In exchange, they give you a contract called a checking account, savings account, money market account, or certificate of deposit.

Then the bank takes your money and goes out and makes a profit with it.

Most people never stop to think about this. They've become so accustomed to banks that they simply assume that's how the world works. The bank owns and controls the deposits. The bank owns and controls the lending process. The bank decides who gets a loan. The bank decides the terms. The bank decides the repayment schedule. The bank decides the penalties. The bank decides whether you qualify.

A banker once told me that banks lend money to people who can prove they don't need it.

There's a lot of truth in that statement. If you have questions about how this dynamic works and what you can do about it, our FAQ page covers many of the most common ones.

How Mutual Life Insurance Is Different

A mutual life insurance company operates under a different structure. When properly designed, the policyholder receives equity in a contract that they own. That equity accumulates over time. It remains available. It can be leveraged. And unlike bank deposits, the policyholder participates directly in the profitability of the company because the policyholders are the owners.

That's a radically different arrangement.

The rules of finance haven't changed. The laws of economics haven't changed.

The difference is who sits in which chair.

The difference is who benefits.

This Isn't About Death

People often assume I'm passionate about life insurance.

I'm not.

I'm passionate about financing. I'm passionate about helping people gain more control over the financial process that governs every area of their lives. You can learn more about that mission on our about page.

Without financing, you can't buy a house. You can't rent an apartment. You can't buy food. You can't buy a car. You can't pay for education. You can't start a business. You can't make investments.

You can't do anything.

Everything in life flows through finance. And that's why I realized recently that what Infinite Banking practitioners offer is more fundamental than almost anything else. We're not really selling life insurance.

We're teaching people how to finance the things of life. If you want to go deeper on these ideas, check out the Duryea Financial podcast or browse our training videos.

If Something Better Exists, I'll Use It

People sometimes assume I'm emotionally attached to life insurance.

I'm not. I want the truth.

If someone shows me a financial instrument tomorrow that stores wealth better, provides more control, creates more freedom, offers better financing opportunities, and benefits the owner more than a properly designed whole life insurance policy, I'll switch immediately.

I'll cash out my policies. I'll throw my life insurance license in the trash. And I'll move over to whatever works better.

Believe me, I'm always looking. Anything and everything.

The question isn't whether something is fashionable. The question is whether it works.

So far, I've found nothing that accomplishes the financing function more effectively than a properly structured participating whole life insurance policy from a strong mutual company.

If that changes, I'll change too.

Final Thoughts

This isn't about buying a death benefit. It's about understanding finance. It's about recognizing that money is a commodity that's bought and sold. It's about understanding that every purchase begins with the purchase of money itself. It's about becoming aware of the financial system you're already participating in whether you realize it or not.

And it's about asking a simple question:

If I'm going to spend my entire life financing everything I buy, shouldn't I understand the financing process as deeply as possible?

If you're ready to explore what that looks like for your own financial life, book a discovery call with Michael.