Now is the time to open your own Infinite Banking Policy: https://bit.ly/47EWtRd
Is "buy term and invest the difference" actually the superior strategy or are both sides missing the bigger picture? In this episode, I break down the classic BTID vs. whole life debate with real numbers, real timelines, and a third approach I believe builds more wealth and more flexibility now and later.
I start by laying out what BTID really assumes: you buy a cheap 20-year term life policy and diligently invest the rest (most folks don't but let's assume you do). For a healthy 45-year-old male, I use an example premium of $674 per year for $600,000 of coverage, and assume you invest $24,326 annually at a generous 8% market return for 20 years. That grows to about $1.2M before taxes. If you follow the (already shaky) 4% rule, that's $48,000 a year then taxes trim it to about $36,000 a year, roughly $3,000/month. Oh, and when the term ends, the premium explodes (think $20k+ per year in your late 60s), which is why
On the other side, I'm not comparing to old-school, high-commission whole life that smothers your early cash value. I compare BTID to a Max-ROI, Infinite Banking-style whole life design. With $25,000/year going in, cash value grows steadily (without market risk), and the death benefit increases over time (about $1.636M after 20 years in my example). Here's the kicker: using tax-free policy loans/withdrawals, you can target roughly $50,000/year tax-free for 30 years and still leave a six-figure death benefit. That's more usable, after-tax income than BTID at the same savings rate, with liquidity, safety, and control all the way through.
But I don't stop there. The third option and the one I actually use is to pair a properly structured whole life policy with real investments that cash-flow (real estate, private credit, businesses, even your own company). Your policy becomes a tax-advantaged cash reserve and opportunity fund your "dry powder." I can keep money compounding inside the policy and still leverage it into deals for higher yields. It's not "either/or." It's "both, done right."
We also talk estate planning reality: if you grow to a $10M+ net worth, the estate tax can be brutal. Having permanent life insurance in force (that you didn't start at age 70 when it's pricey and medically risky) can provide tax-free liquidity so your heirs don't have to sell cash-flowing assets at the worst time. As Tom Wheelwright says, term is an expense; whole life is an asset. I agree when it's designed for maximum efficiency and paired with productive investments.
Bottom line: BTID looks good on a spreadsheet until you model taxes, behavior, sequence risk, premium hikes, and estate realities. A Max-ROI whole life + investing approach gives me control, cash flow, and optionality and lets me live work-optional sooner while still creating a meaningful legacy. If you want to see how this could fit your plan, head to MoneyRipples.com and grab updates on my Work Optional Blueprint book launch.
