R. Nelson Nash and His Laws: What Do We Have To Overcome To Be Successful with IBC?
The Golden Rule
When it comes to managing our finances, R. Nelson Nash’s principles for the Infinite Banking Concept (IBC) offer a clear path for taking control of our money, not just for ourselves but for generations to come. Nelson’s teachings are an anchor to the past, a blessing to the present and a gift for the future, tying generations together with 5 simple principles.
His approach goes beyond typical banking and investing; it’s a philosophy built on self-reliance, stewardship, and integrity. And, much like the Golden Rule—“those who have the gold make the rules” and “treat others as you want to be treated”—Nash’s principles encourage us to own our financial future and use that power responsibly.
1. Think Long-Term—Generationally
Nash trained as, and spent 10 years as a Forester and this is where his “Long Range” thinking started. Nelson famously said,
“plan as if you are going to live forever and live like today is your last day.”
Nash’s first principle, “Think Long-Term,” encourages us to look far beyond the next paycheck or investment. It’s about creating a financial legacy, a system that benefits not just us but our children and their children. Imagine a foundation so solid that it becomes a family asset passed down through generations. Thinking long-term changes the game—it’s not just about building wealth for today but creating a sustainable financial structure that brings stability to our loved ones long after we’re gone. By adopting this mindset, we’re living the Golden Rule: we’re preparing a better future for those who come after us.
2. Don’t Be Afraid to Capitalize—Pay Your Premium Deposits
The second principle might seem like common sense, but it’s one that often trips people up: “Don’t be afraid to capitalize.” In IBC, capitalizing means consistently paying the premium deposits into your policy. Just like a farmer invests in seeds before reaping a harvest, paying premiums is a necessary part of building a powerful, cash-flowing system. It takes commitment, but the rewards far outweigh the effort. You’re essentially setting yourself up as a self-sustaining bank, with funds that grow and are available to you when needed. Capitalizing requires discipline, but it gives you the power to shape your financial future instead of relying on traditional banks.
3. Be the Honest Banker—Don’t Steal the Peas
Nash’s third principle, “Be the honest banker,” may sound simple but has profound implications. He uses the analogy of not “stealing the peas”—that is, don’t take a loan against your cash value without having a plan to repay it. This principle is about integrity. Just as we’d want a bank to be fair and responsible with our deposits, we need to treat our policy loans with respect. Being the honest banker means we have a commitment to ourselves and our financial system. We borrow against our policies responsibly, with a clear plan to pay back. This approach doesn’t just protect our capital; it’s an act of self-discipline and respect for the financial ecosystem we’re building. Otherwise, if we go out the back door and don’t replenish our system we are stealing.
4. Don’t Do Business with Outside Banks
The fourth principle speaks directly to the independence that IBC aims to provide: avoid doing business with outside banks or third-party lenders. Today, banks are making 400-1500% annually on the HARD-EARNED money you deposit. What would it feel like for you to take the place of the bank and give yourself this kind of earning power? By keeping our financial transactions within our own system, we maintain control over interest and avoid unnecessary fees or conditions imposed by third parties. This isn’t just about independence; it’s about fully embodying the Golden Rule. By relying on our banking system, we’re no longer at the mercy of external institutions dictating the terms. Instead, we make the rules. We set the pace, and we control how our money works for us. This kind of autonomy is empowering and aligns perfectly with Nash’s vision of banking at a “you and me” level.
5. Rethink Your Thinking
Finally, Nash encourages us to “Rethink Your Thinking.” This principle invites us to challenge conventional financial wisdom, to question the “rules” we’ve been taught, and to approach money differently. Infinite Banking requires a shift in perspective—a willingness to see our policies as more than insurance, but as an evolving, living asset that grows with us. By rethinking our approach, we tap into new possibilities. We’re no longer stuck in the old mindset of scarcity and dependency. Instead, we embrace an abundant view of what our money can achieve and find creative ways to keep it working within our control.
Tying It All Together
Nelson Nash’s principles aren’t just steps; they’re a guide to building a financial life centered on integrity, responsibility, and abundance. And just like the Golden Rule, they remind us that with control over our money comes the responsibility to treat ourselves and our resources with care and respect. Also, Nelson taught us that retirement was made up and instead we should focus on cash flow. Having a storage of CASH in your banking system for when given an opportunity appears is exactly what Nelson meant by the Golden Rule. By thinking long-term, capitalizing steadily, borrowing honestly, avoiding dependency on outside banks, and challenging our assumptions, we become the masters of our financial destiny.
In this journey, we hold the gold, and we make the rules. And as we do, we’re not just improving our own lives but creating a legacy of financial freedom and integrity for those who follow. This is the heart of Infinite Banking—the power to build, the freedom to choose, and the responsibility to lead our own financial future with wisdom and love.
