Infinite Banking Learning Lab + Private Bank Ledger

Single-file • Local-first • General Journal accounting • Cash-value policy capitalization • v1.0
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LocalStore: OK

What “Infinite Banking” is (book-inspired, original summary)

Learning

Core idea

Build a personal (or corporate) “banking system” by capitalizing it with a properly structured permanent life insurance policy’s cash value (often a participating whole life policy), then use that pool of capital to finance major purchases or lend internally. When you borrow, you typically borrow against the policy’s cash value (policy loan or collateral loan) instead of liquidating assets.

Mechanics you can model in this app

  • Capital: cash value life insurance is booked as a bank asset (“Cash Value Policy”).
  • Liquidity: borrow against that asset (track “Policy Loan Payable”) to bring cash into the bank.
  • Banking: accept deposits (client savings), issue loans (loans receivable), place investments.
  • Accounting: everything is recorded through one General Journal with balanced debit/credit lines.
  • Control: you can compare “external bank financing” vs “internal policy-based financing.”

Important reality checks

  • Cash value takes time to build; early policy years can be inefficient.
  • Dividends are not guaranteed; policy design matters.
  • Loans accrue interest; unpaid loans can reduce death benefit and/or cause issues if policy lapses.
  • Tax treatment varies by country/province/state and entity type (personal vs corporate).
How to use
Walkthrough → Journal → Reports
Accounting model
Single Journal (General Journal)
Data storage
LocalStorage (+ optional encryption)
Sources are listed in the Learn → Sources section inside this app.

Concept Map

Framework
Layer Concept Ledger Model (accounts) Journal Templates
1 Capitalization Cash Value Policy (Asset), Bank Equity Pay Premium, Record Policy Growth, Capital Contribution
2 Liquidity Bank Cash (Asset), Policy Loan Payable (Liability) Take Policy Loan, Repay Policy Loan, Pay Loan Interest
3 Bank Operations Client Deposits (Liability), Loans Receivable (Asset) Client Deposit/Withdrawal, Make Client Loan, Client Repayment
4 Profit Engine Interest Income, Investment Income, Expenses Record Interest Income, Record Investment Income, Pay Expense
5 Decision Quality Reports: Balance Sheet, Income, Client Statements Use Reports to compare scenarios
You can modify the chart of accounts and add client sub-accounts as needed.

Glossary

Definitions

Cash value

A savings component in some permanent life insurance policies. In bookkeeping, you can treat it as an asset with its own balance.

Policy loan vs collateral loan

Two common liquidity methods: borrow from the insurer (policy loan) or borrow from a lender using the policy as collateral (collateral loan). Ledger entries differ, but both can be modeled as cash-in with a corresponding liability.

Capitalization

Funding your “bank” so it can operate. In this app, capitalization can be equity contributions and/or policy cash value growth.

Loans receivable

Asset account representing money clients owe the bank. Interest income is recorded separately.

Flashcards + Quiz

Flashcard

Click “New Flashcard” to begin.

Sources (for further reading)

Links
This app does not reproduce any copyrighted book text. It provides original educational summaries and a bookkeeping sandbox to model cash flows.

Guided Walkthrough: build a “banking system” in the ledger

Hands-on

Goal

In 10 minutes, you’ll (1) set up policy capital, (2) accept a client deposit, (3) issue a client loan, (4) record repayment with interest, and (5) review the Balance Sheet and client statement.

Step Action What it does Run
Notes: This is an illustrative bookkeeping flow. Real-world policy funding/charges, loan mechanics, and tax implications vary by insurer and jurisdiction.

Clients

Client Statement

Chart of Accounts

Single Journal accounting

You record everything in one General Journal (balanced debits and credits). The ledger then produces reports like Trial Balance, Balance Sheet, and Income Statement.

General Journal

Key Reports

Balance Sheet (snapshot)

Income Statement (period)

Trial Balance

Policy Capital Dashboard

Backup / Restore

Local-first

Export

Download your full data as JSON (encrypted data will export as encrypted).

Import

Restore from a JSON backup file. This overwrites current data.

Tip

If encryption is enabled, you’ll need the same passphrase to unlock imported data. If you forget it, the data can’t be recovered.

Settings

Security + Display

Display

Encryption

Passphrase encryption (AES-GCM)

Optional at-rest encryption for LocalStorage data. This improves privacy on shared machines but does not replace proper endpoint security.

Encryption is currently off.

About

This tool is a bookkeeping sandbox and learning environment. It is not financial advice, and it does not replace licensed insurance, tax, or legal guidance. Always validate real policy terms with the insurer and confirm accounting/tax treatment with qualified professionals.