We know managing the financial needs of your family’s present and future can get complicated and overwhelming. Our team of advisors can help you consolidate your wealth in a way that works for your family and your investments. With the infinite banking concept, we teach you to think beyond the one-dimensional goals of traditional financial planning. With decades of experience helping clients like you, our team of experts can put you and your family on track to grow your wealth instead of just preserving it.
Our method can be broken down into four major components. Each of these components was created with the goal of developing a strategy-oriented approach to optimizing wealth that is focused on keeping your money working for you instead of your bank or lender.
Present Dollars vs. Future Dollars in Infinite Banking
The first step to understanding the Infinite Banking concept involves looking at your use of present dollars, as opposed to future dollars. Present dollars represent maximum buying power. Future dollars, on the other hand, are diluted by inflation.
When you have money in the bank, your financial institution gets to use your dollars today by offering to return them back to you at some point in the future—with the compound interest added. Why not make that compound interest work for you instead of your bank?
Infinite Banking: Explaining Velocity
At Alpha Omega Wealth, one of the first concepts you’ll be introduced to is the idea that in order to maximize your wealth, your money must be in motion. It must have velocity. Although understanding velocity of money may be difficult at first, Wikipedia provides one of the most concise and comprehensive explanations of the concept:
The velocity of money (also called the velocity of circulation) is the average frequency with which a unit of money is spent in a specific period of time. Velocity associates the amount of economic activity associated with a given money supply.
If, for example, in a very small economy, a farmer and a mechanic, with just $50 between them, buy goods and services from each other in just three transactions over the course of a year:
- Farmer spends $50 on tractor repair from mechanic
- Mechanic buys $40 of corn from the farmer.
- Mechanic spends $10 on barn cats from the farmer
As you can see, $100 changed hands in the course of a year, even though there was only $50 in this little economy. That $100 level is possible because each dollar was spent an average of twice a year which is to say that velocity was 2/yr.
Consult the Experts
As you’ll learn during your free 45-minute consultation, velocity is one of the most efficient and underutilized wealth management strategies. Our financial advisors will explain infinite banking and show you how you can use this concept to empower yourself and take control of your finances, today. Contact us today.