Reading Becoming Your Own Banker Part 1: A Guided Overview

This section of Nelson Nash’s Becoming Your Own Banker gives context to the entire book.
At its core, banking is simply how money flows — from the pool of capital, through us, to meet our needs. The key question Nelson asks is this:

“How much of the banking function do you control as it relates to your needs?”

That’s the foundation of Infinite Banking. It’s not about life insurance — it’s about learning how to create and control your own banking system so you can finance 100% of your needs on your own terms.

How the Infinite Banking Concept Began

This section introduces Nelson Nash — the man, his mindset, and the moment everything changed.

Nelson’s story starts during a period of financial struggle when interest rates skyrocketed, and he found himself buried under conventional debt. Then came his revelation: he already had access to capital through his life insurance policies.

As he put it:

“You can get to money, during these awful times, at 5% to 8% from three different life insurance companies through policies that you own. The only thing that limits how much you can get to is how much you’ve put in.”

That realization became his golden rule: Don’t Be Afraid to Capitalize.
He saw that instead of relying on a banking system he couldn’t control, he could become the banker — using a system that he owned, where the only limit was what he contributed.

Imagination

“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

This chapter is where mindset meets money. Nelson explains that Infinite Banking requires imagination — the ability to think beyond traditional financial norms.

He wrote,

“The Infinite Banking Concept is an exercise in imagination, reason, logic, and prophecy.”

While reading, relate each example to your own life. Picture how it would feel to control your own capital, to profit from your own financing needs. That imagination is what unlocks your potential as your own banker.

The Grocery Store

This is one of the most important lessons in the entire book. Nelson uses the grocery store to illustrate how business works — and how you can apply those same principles to your own financial system.

He asks you to imagine owning a store where you are both the owner and the customer. Every time you shop, you have a choice — to shop at someone else’s store and let profits go elsewhere, or to pay yourself and keep those profits inside your system.

That’s the essence of Infinite Banking. Once you understand the grocery store example, the rest of the book becomes much easier to grasp.

“If you understand the grocery store, the rest of learning how to be your own banker is a piece of cake.”

The Problem

Here’s where it gets personal.
Most people don’t truly understand how much interest they’re paying to banks and lenders. Borrowing has become so normalized that we forget to measure the cost.

As you read this section, take time to look at your own finances. Go through your budget, calculate how much of your after-tax income goes to interest, and see how much of your wealth is flowing away.

Nelson’s goal isn’t to make you feel guilty — it’s to show you the path to control. Once you see the problem clearly, you’ll understand why creating your own banking system is the solution.

Creating a Bank Like the Ones You Already Know

Nelson isn’t suggesting you start a brick-and-mortar bank. He’s teaching you how to mimic the function of banking within your own financial life.

The tool we use is a Participating Whole Life Insurance Policy — a system that already has all the components of banking built in: capital, guarantees, and compounding growth.

“All the ingredients are already there. All you have to do is understand what is going on in such insurance plans and tap into the system.”

Creating Your Own Banking System Through Dividend-Paying Life Insurance

Here are the key takeaways from this section:

1. The Cost of Capital
Many people hesitate at the idea of paying interest on policy loans. But remember — interest isn’t the enemy. It’s the cost of capital, and capital always has a cost.
In this system, you control that function. You’re both the borrower and the banker. The difference is, the profits stay in your system, not the bank’s.

2. Behavior Matters More Than the Tool

“How you drive the car and care for it is far more important than anything else.”
Your behavior — how you use and repay policy loans — determines your success far more than the policy design itself.

3. Understanding How Whole Life Works
When you own a participating whole life policy, you’re a part owner of the company. That gives you guaranteed access to your capital — up to 90% of your cash value — at any time. This access is contractual.

Life insurance companies also build in safety margins through actuarial design. When there’s a surplus, it’s returned to you in the form of dividends. Technically, these are refunds of overpaid premium — not taxable income — and when reinvested as paid-up additions, they increase your policy’s growth tax-free.

4. Focus on Financing, Not Just Insurance
People often fixate on the cost of insurance, yet think nothing of financing cars or homes at far greater costs over time. Nelson points out that your need for financing will always exceed your need for life insurance.
When you solve the financing problem, the insurance takes care of itself — because every premium paid adds protection and builds capital you can use.

Final Thought

As you read Becoming Your Own Banker, keep reminding yourself:
This isn’t a book about insurance. It’s a book about control.
It’s about changing the way you think about money, interest, and ownership.

You’ll be in the banking business your entire life — the only question is whether you’ll be the customer or the owner.