“What Could Prevent Me from Doing IBC?” [Part 4/5]
A discussion of obstacles to implementing the Infinite Banking Concept. Obstacle #4: “IBC doesn’t fit with my (and/or my family members’) financial training.”
IBC doesn’t fit with my (and/or my family members’) financial training
Nelson used to say in his seminars that we are all surrounded by “financial noise.” It’s worse than the white noise you hear on old televisions because financial noise sounds appealing. It’s the noise of Bloomberg and CNBC financial entertainers, and they’re paid well for a reason. It’s the near-constant onslaught of other peoples’ narratives competing for your attention, be it conscious or subconscious. And when it comes to money, the noise is blaring.
One tremendous source of financial noise is that which comes from the local financial “experts.” This is your uncle, nephew, brother-in-law, father, or other (likely male) relative who has some sort of financial industry experience. Maybe they have held (or worse, do hold) an active life insurance license. Maybe they’re lawyers who deal with financial matters. Maybe, horror of horrors, they’re Certified Public Accountants (CPAs).
I’m kidding. Sort of.
One of the psychological problems Nelson identifies in BYOB is “the Arrival Syndrome.” He says, “you can’t teach a man anything who already knows everything.” Many of my friends in the financial services world have fully, totally arrived. They’ve arrived so hard they’ve set up camp, planted churches, constructed cities, and raised armies.
I used to be pretty active in the local Chamber of Commerce here. It turns out that a lot of bankers and other financial services folks take to that sort of venue. I made and still am friends with a number of them. We’re on good terms, thankfully, because they’ll occasionally see a Facebook post of mine (like one sharing this Medium post) and chide me for giving bankers such a hard time. I get it, and look, I’m not disparaging the foot soldiers, the rank and file of the financial services world who are just doing their job, working hard, and trying to put food on the table. Many in the financial services world genuinely want to help others, and they believe that what they were taught in their various company and institutional training will be helpful. Consequently, what they did not learn (particularly if they’ve been in business for a while, and super particularly if they have been financially successful) is most likely unhelpful. Of course, the IBC does not make it into the curriculum of the financial designation granting institutions or into the boardrooms of major financial companies.
For example, suppose someone is interested in learning the IBC. They read the book and may even talk to an agent to get some remaining questions answered. Feeling pretty confident, they do what we all do, they seek some external validation from trusted friends or family — and if they’ve got experience in the world of finance, all the better. It turns out this individual’s uncle is an accountant and has done taxes for all of the family for 20 years. The IBC-student decides to ask for his uncle’s opinion.
This scenario likely isn’t going to end well. Put it this way: Suppose your brother is an auto mechanic, and you‘ve been going to him for 20 years to get your oil changed and for various other services. One day, you approach him — in genuine, honest, good faith — and you ask him what he thinks of your recently married wife’s brother’s suggestion that you sell your current car, purchase a new one, and begin a new service regimen with his shop. Your new brother-in-law has a unique view on vehicles, one you haven’t heard before — certainly not from your own brother — and you believe it would be in your best interest to follow his advice. Like anyone would do, you wanted to run it by “your guy” in the business (your brother), first, to see what he thinks.
That scenario isn’t likely to end well either. It isn’t a perfect example, but you get the point.
Nor is this particular obstacle necessarily about family. Your trusted adviser can be a distant relative, a close family friend, or just the guy your family has happened to use for the last however long.
It’s important to realize that (1) your trusted adviser’s hostility or skepticism to the IBC is likely well-intended. I mean, how often do genuinely novel approaches to finance that actually work come along? Plus, if you haven’t been doing obviously poorly in the world of finance, then you’re unlikely to see the many problems we are conditioned to believe are acceptable. Your trusted adviser probably doesn’t recognize them either, or else he would have said something long ago. (For example, amortization in a mortgage: If your adviser has not raised the need to develop a plan to forever avoid mortgage lending for all future generations of your family, you have encountered red flag #1.)
Which leads me to (2): the plain fact is that your trusted adviser just doesn’t know what you’re talking about. In finance, skepticism from ignorance carries weight. We say, “Well, my uncle is a Certified Financial Planner and he doesn’t know what this is, so I don’t know…” That’s quite different than, say, the medical field. If an electro-cardiologist alerts you to a unique heart condition, you wouldn’t doubt the diagnosis just because your sister, who happens to be a nurse, hasn’t heard of the condition before. And it’s not a matter of authority. You go with the diagnosis that, to you, seems to best reflect reality.
If the trusted adviser isn’t addressing the volume of dollars flowing out of your control to third-party lenders; if there’s no discussion of the time-cost of dependency on conventional lending; if there’s no discussion of capitalization and how that affects your experience in investing; if the idea is to immediately expose savings to market risk via government plans without consideration of alternatives, then it could be the case that your trusted adviser’s perspective is simply not addressing the financial problems we realistically face.
I’m not telling you to ignore your trusted financial adviser. In fact, I’m telling you the opposite. I’m telling you to do your homework and be ready. The skepticism will come, and it may even be pretty sophisticated. My encouragement is that you go in with a positive attitude and no matter what, follow that feeling in your gut that wants questions answered. If something doesn’t feel right or doesn’t make total sense, push back. And I don’t just mean to your trusted financial adviser. Push back in your own education. Push back in your conversations with other agents. Get your questions answered, and if, in the end, something does not make sense to you, then maybe you’ve found the answer you were looking for in the first place.
The noise will come. It’s unavoidable. What you want to do if you’re learning about the IBC for the first time is to be prepared for it. If the lack of external validation from trusted advisers for reasons like those explained above is a deal-breaker for you, then it could be a deal-breaking obstacle on the path to becoming your own banker.
