Financing Your Own Car

In one of the most detailed examples in BYOB, Nash compares five methods of purchasing a car over a lifetime. Method A is leasing — the most expensive, you never build equity. Method B is a conventional bank loan — better, but you're paying interest to the bank. Method C is paying cash from a sinking fund — no interest paid, but you lose the growth on the money spent.

Method D introduces self-banking using a CD. You save, "borrow" from yourself, and repay with interest. Better — you're capturing interest payments. But the returns are modest and the earnings benefit the bank's stockholders.

Method E uses dividend-paying whole life. You fund your policy, borrow against cash value, and repay at the same rate you'd repay a bank. Your cash value continues earning guaranteed interest and dividends while the loan is outstanding. There are no stockholders — in a mutual company, you are the owner.

Nash's analysis shows Method E overtakes Method D around year 14, and the gap widens every year after. By retirement, the CD depletes in roughly 5.7 years at $50,000/year withdrawals. The whole life approach continues growing and generating income indefinitely — while also maintaining a death benefit for the next generation.