A Better Place to Store Capital

Moving Beyond Banks to Protect and Grow Your Capital

Brian Wilson

10/2/20232 min read

brown and white concrete building
brown and white concrete building

Most people store their money in the bank. What are the potential implications of that choice? We have been conditioned to accept and use banks as the best place for our savings and emergency funds but there could be a better alternative.
Most people remember the banking failures and financial crisis of 2008. I remember it well because my wife and I had just purchased our first home together. While some of us remember those pains what is lost is that the FDIC Reserve Fund was sitting at -8 billion dollars after this episode. Today, people still think the FDIC will be there to bail them out just as they did then. How can they? The FDIC maintains a reserve that will cover a mere 1.1% of the insured deposits within the fractional reserve banking system.
What is also not discussed are the implications of the Frank-Dodd Act, passed in 2010 in response to this financial crisis. The government has made it clear that in the future bail-ins would be required to keep financial institutions afloat. The government doesn’t want to keep bailing out banks. That just leaves you and I to supply the bail-in money. At this point most would say that the money left on deposit is theirs and that the banks have no right to take it but….the Frank-Dodd Act ensured that moving forward bank deposits would be legally considered unsecured loans. Do you really want to roll those dice when the odds are set completely against you?
Thankfully there is a better way to warehouse cash. Dividend-paying, whole life insurance from a mutual company offers a safe and liquid place to store money that provides peace and certainty regardless of what else is going on around you. This is an asset that offers private control and guaranteed results. It is also an asset that allows you to do more with your money. Some assets are “either/or” and require a loss of liquidity and opportunity while properly structured life insurance is an “and” asset that can augment and improve nearly any financial strategy.
This asset has been around nearly 200 years and has consistently paid dividends every step of the way. Yes, these company’s have paid dividends during every financial crisis, stock market crash, and every world war. They even paid out during the Great Depression. With the tremendous volume of noise in the financial world it is easy to overlook this safe and secure asset. It is an asset that has been much maligned without any critical thought or understanding.
Storing cash in insurance should never be misconstrued as “investing”. To be sure, you are investing in your family’s future and creating a perpetual tailwind behind your money but life insurance is an asset class all on its own. You own the policy and the living benefits that will leave you prepared for any opportunity or emergency that should arise. You can create a legacy to lift the next generation while simultaneously leveraging your cash today. It is a one-hundred-year plan with provision for today.