- Are you wondering how to keep $1,000,000 in your bank? You should be. And guess what? I might just have a solution that is better than the bank. So stick with me and let's just get into it, right? Okay, first, I wanna talk about the Great Depression, because this is the point when our grandparents were scared to death, or maybe some of your great grandparents were totally scared to death of banks. They were scared that they would lose money. Well, what happened back then? Well, back then people were taking money from the bank. They were using it. They're actually borrowing from the bank and investing it in things, I really shouldn't say investing, gambling into the stock market. They thought the stock market was roaring as the Roaring Twenties. Everything was great. You can never lose money. They're doing different ventures. Everybody's making money, right? Well, of course, when things start hitting the fan,

markets start tanking, people start to run on the bank to get their money 'cause, remember, they were gambling with that money. This is why, by the way, it's actually illegal to borrow money from the bank to put into the stock market. That's even why when I was a financial advisor, when people would buy mutual funds, we would have them initial a little acknowledgement saying, I did not borrow money to put in these mutual funds. I know that many people don't realize that, but that's the big key. Banks do not want you to gamble your money away. Well, that just made the Great Depression even worse. Everybody started running on the bank, trying to get the money out. 50% of banks went under. They collapsed. They were out of business. Kaput. That scared people to death. This is why the government tried to step in and say, Let's make sure this doesn't happen again.

This is why they created FDIC, right? The FDIC Protection. If you ever see Suze Orman, she's done some of the ads saying, FDIC, it's great! We'll let you know what that does. That's kind of like an insurance protection. Really, it's federal. The government says, Hey, we'll protect your money in a bank account up to $250,000. So a quarter million is protected, not a full million dollars, a quarter million is protected inside that bank. Now there's something to understand here. Although you have that little FDIC-insured that makes you get that warm and fuzzy, it's kind of like Tommy Boy, and he talks about, you know, Look, it's on the box. You got it on the box. It makes me feel warm and fuzzy. I love you. He talks about that and he's like, Listen, I could take a crap in your box,

and say it's guaranteed all we want, but we know you're just getting a piece of crap, right? This is kind of what the government's done with us, right? They went and they said, All right, we're gonna try to protect it. Here's the deal. You actually look at how much the FDIC has, and I'm probably being a little bit generous here. They only have 3% of the total bank balances that they actually have in FDIC Protection. So it's kind of like insurance for them, but they're not saving all the banks money to protect all of your money. They've only got about 3%. So if we ever have a massive banking crisis, kinda like what we had, remember, last recession, they had to bail out the banks, right? The Feds stepped in trying to bail out banks because they knew people would be really losing money. And if they hear about that, everybody runs in on the banks,

and then the FDIC is screwed, right? So, what do they do? They said, Hey, let's bail 'em out really quick before it gets worse. Imagine this, what if 10%, 25% of banks went outta business, not 50%. If it were 10 or 20% and there's only 3% of the total bank balances in there, how long do you think it'll take 'em to pay to give you your money back? So even if you only keep 250,000 in the bank, it doesn't necessarily mean that your bank is 100% fully ensure that you'll get it tomorrow, okay? Understand that, that you could be waiting months or years down the road before you actually get paid from FDIC's protection. Now, what's a strategy you can do if you have a million bucks? Now, could you be using FDIC protection? You could say, Well, at least I'll try to use that I can.

You can get four different bank accounts, each with a quarter million in them, right? It's not the best strategy, and it's not like you're gonna make lots of money, but you could keep a million dollars safe technically doing that. It's better than probably holding onto cash, but just know there's still that slight risk. Even though banks are supposed to be guaranteed, there is that slight risk that your money may not be available if the worst were to happen, if things started to collapse once again in the financial markets. And that's always a possibility. So you could get four different bank accounts not to exceed $250,000 and protect that full million. But is there a better way? Is there something else we can do where we can have similar or even better protection than that, and we can have maybe millions of dollars stored up? There is one place, and it's a place I never expected it to be.

In fact, when I first heard about it, I thought it was bull. I didn't even think that was reality. The place is inside life insurance. Life insurance policies, I'm not talking about your normal death benefit, like term insurance that you buy and you just die and that's the only way you get paid. We're not talking about death insurance, we're talking about life insurance, like whole life insurance, specifically. Whole life insurance is actually protected against loss. One, you get a guaranteed return, usually for most companies at least 2 or 3% a year, if not more. That you have a guaranteed minimum return on your money. But, two, to protect the balance of your money just in case an insurance company goes under, they buy what's called reinsurance. Reinsurance companies are often global banks, global insurance companies that will essentially kinda do what FDICs does for banks they do for insurance companies.

If an insurance company ever becomes insolvent, they ever go outta business, reinsurance steps in, makes sure that all your policies, all the money that's in 'em, and the death benefit is guaranteed to pay out if it needs to, at least until another insurance company can come in and buy 'em up. So, this happened with a company in Salt Lake City, Beneficial Life. Beneficial Life no longer writes new insurance. They stop selling insurance. Now they still have money in the reserves and everything to keep it in there. But if they all of a sudden went outta business early for whatever reason, the reinsurance companies can step in and say, Hey, we got it covered, until some other company decides to buy up their book of business, and they're fine, right? But your money stays safe. Now put this perspective, I mentioned earlier, I talked about the Great Depression, right? We talk about 50% of banks went out of business.

during that period of time. I don't think it's gonna be that bad again, although we never know what could happen. They did try to put some safeguards to ensure that banks don't become overleveraged and people aren't doing some crazy stuff of that money when they're borrowing from the bank. But during that period of time, even though there was half of banks that went outta business, only four insurance companies actually went outta business, four life insurance companies to be specific. Four of 'em went outta business. Why only four? Well, the one thing that insurance companies can't do that banks can is banks can loan out more money to people than what they have in actual cash. So understand that banks have what's called fractional-reserve banking. They can actually go and leverage more money. So if you give them $1 in a savings account, they can generally loan out up to $10.

In fact, before the last financial crisis, you wanna know why it got so bad for some companies, for some banks specifically? It's because the government actually passed and allowed a law for some of the big five banks, the big ones we talk about like Wells Fargo, Chase, those kind of banks, they were allowed to loan out 40 times the amount of money that they had. And Fannie Mae and Freddie Mac who had all the mortgages and they were having some issues, 100 times the amount of cash that they were holding. This is why banks can get in trouble. They become overleveraged. If you had a hundred thousand of cash, but then you had $1,000,000 of credit card debt, that's what banks kind of have, right? So that was the big issue that they were running into. Well, insurance companies can't do that. They can't loan out anything. I mean, other than what they have,

they can only use the cash that's in their possession, and that's it. They can't over-leverage. They can't do that kind of stuff. So, one, they're safer than banks because they can't over-leverage. But, two, they also get reinsurance companies to come in and back 'em up just in case. And you know what's amazing? Is that you can store millions inside of this and still have the protection. In fact, in most states in the United States, even if you were to be, not just from the insurance company standpoint, for safety of your money, but if you were to be sued or a creditor says, Hey, I'm gonna put liens against your properties, or whatever it might be, even if somebody wins on a lawsuit, in most states they cannot get to your money even if you have millions of dollars inside your life insurance policy. So if you buy the right kinda whole life,

especially when you buy what we refer to as a Max ROI Infinite Banking Policy, where it's lower cost, higher returns. Now you have more cash building faster, protected from lawsuits and creditors. It's protected from taxes 'cause it's tax-free. It's like a tax-free supercharged savings account that's better protected than even the FDIC does with your own bank. So if you guys wanna learn how to do that, you can always go to moneyripples.com to learn more information about how to do that. Also, I invite you to like and subscribe to this button on our Money Ripples page. Like it, subscribe, follow more. In fact, go to our playlist. If you wanna learn more about this infinite banking thing, go to our playlist. There's actually an infinite banking playlist. You can go binge on all these short videos, different stories, even clients that have used this showing how they're able to not just save

and preserve their money and make a better return than point nothing percent in the bank, but they're able to double-dip on their money. They're able to make money in two places at the same time when they use that money to buy things, like real estate investing and other investments to get them to get paid twice. So cool, so awesome, check that out. Again, check out that playlist, and if you have more questions on this, go to moneyripples.com. And for the next video, check out how you can buy a car using this infinite banking as well. (upbeat music)

How Do I Safely Keep $1 Million Dollars in the Bank? | Financial Literacy with Chris Miles

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