The Velocity of Money
Using the same dollar multiple times through policy loans and repayment cycles multiplies its productive power.
From Becoming Your Own Banker, Chapters 6–7; Building Your Warehouse of Wealth, Chapter 5
In economics, velocity refers to how quickly money circulates. A dollar that changes hands ten times generates more economic activity than a dollar in a vault. Nash applied this to personal finance through IBC.
You fund your policy, building cash value. You borrow against it to buy a car. Your cash value continues growing as if you hadn't borrowed. You repay the policy loan, restoring borrowing capacity. Then you borrow again for a business expense. The same capital is deployed over and over.
Compare this to conventional saving and spending. When you save $50,000 and buy a car with cash, that money is gone — it served one purpose. With IBC, that $50,000 in cash value still exists in your policy, still growing. The policy loan let you access capital without depleting your wealth. When you repay, you're positioned to deploy again.
Each cycle — fund, borrow, repay, borrow again — puts the same dollars to work multiple times. The cash value earns returns throughout. The money you borrow is used productively. And the interest you repay supports the company's dividend capacity. The velocity of your money has increased dramatically.