The IBC works due to several factors…some of which are a “must”:
- An individual must have the “discipline” and “desire” and the ability, (regular cash flow or accumulated lump sums) to save.
- You have to save or accumulate an increasing “Pool of Capitol” over your lifetime. Savers are required for the IBC to work.
- Your money must be accessible. Many people have large sums of money; however, it is often “locked-up” due to the type of investment or accounts used. No access to capital will put stress on your financial position and your family.
- Your money must earn interest that compounds over time, uninterrupted. Albert Einstein understood the power of how compound interest worked. “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”― Albert Einstein *Long-term uninterrupted compounding of interest is a key component of the IBC. (There are many accounts where ones money could increase but few that actually grow from uninterrupted compounding.)
- You must understand that money has a cost! When you spend your cash, (make a purchase); you lose the ability for that amount of cash to earn interest; you give up interest. When you borrow, you pay interest to someone. So you either give up interest by paying cash; or you pay interest when you borrow. There are NO Exceptions!
This is an Economic Truth called the “Opportunity Cost of Money”. You must recognize this principle to appreciate the IBC and how it can work for you.
Borrowing from a pool of money that you own and control makes more sense because you are not under pressure from a Lender to make loan payments back on a regular schedule. This will keep less stress on your financial position and on your family.
And paying yourself back with interest makes even more sense. You are replenishing your “Pool of Capitol” plus re-cooping the lost “Opportunity Cost” of the borrowed funds.
Having Control of the entire Banking Process is The Major Benefit to the IBC!
When you own a Pool of Money from which you may draw funds at any time, (a Bank); and can pay those funds back on your schedule, plus pay yourself interest that you decide; and keep “uninterrupted compounding of interest” working for you…you now have Total Control over the Banking Process and are well on your way to creating real wealth.
Stay tuned for the next Joe’s Teaching Moment