Rethinking Capital: What Marriage, Family, and Business Can Teach Us About Money
The best things in life have to be capitalized.
Think about marriage, raising children, building relationships, or starting a business. What does it take for any of those things to become strong and successful?
Time. Effort. Compassion. Hard work. Patience. Perseverance through adversity.
There is another way to describe all of that: capitalization.
We do not end up with a great marriage, strong relationships with our children, or a successful business without pouring something into them first. In many cases, we invest tremendous amounts of emotional capital, time capital, intellectual capital, and physical effort.
We understand intuitively that a little in will usually produce a little out.
Strong things require capitalization.
What is also interesting is that the capital we invest in these areas often provides benefits while we are still building them.
A marriage does not need to reach some future finish line before we can experience companionship, love, encouragement, and partnership.
We do not have to wait until our children are adults before enjoying conversations, experiences, laughter, and memories with them.
A business does not have to reach its final destination before it can produce revenue, create relationships, serve customers, develop opportunities, or introduce us to people who may remain part of our lives for decades.
The thing being built continues to grow, yet there is concurrent value available along the way.
That is a different way to think about the word capital.
Which brings me to a question:
Why do we often handle capital measured in dollars differently than we handle almost every other form of capital in our lives?
For many people, the conventional financial approach is to accumulate money inside accounts primarily designed for some future purpose. Capital goes in today with the hope that it grows sufficiently for retirement or another long-range objective.
There is nothing inherently wrong with investing for the future. Investing can absolutely be part of a sound financial strategy.
What I find worth examining is the structure.
In many conventional strategies, a significant portion of today's capital is intentionally separated from today's economic activity. We capitalize something for the future while simultaneously turning elsewhere for the financing needs and opportunities of the present.
We may be building an investment account with one institution while borrowing money for vehicles, equipment, business opportunities, taxes, emergencies, or other purchases somewhere else.
That should at least cause us to ask a question:
Could I build capital for the future while also creating greater usefulness and control over that capital along the way?
That question is one of the reasons I became interested in the Infinite Banking Concept.
IBC is a process, not a product.
At its core, it challenges us to reconsider where our money flows first and who controls the banking function within our personal economy.
The objective is significant capitalization while maintaining contractual access to capital that can be deployed throughout the journey.
Instead of thinking only about accumulating dollars for someday, we begin thinking about building a pool of capital that can support opportunities today while continuing to serve long-range objectives.
Properly structured and sufficiently capitalized, that system can allow capital to be deployed toward things such as a business, real estate, equipment, major purchases, investment opportunities, or other productive uses that fit the owner's objectives.
Capital is built.
Capital is controlled.
Capital is utilized.
Capital is replenished.
Then the process can continue.
That starts to look remarkably similar to the way we build nearly everything else that matters.
We pour into a marriage while enjoying the relationship.
We pour into our children while experiencing the joy of raising them.
We pour into a business while using the revenue and relationships it creates.
Why shouldn't we at least explore whether our financial capital can be approached with some of the same thinking?
The point is not that investing is bad.
The point is not that every conventional strategy is wrong.
The point is that capitalization deserves more thought than simply asking where we can get the highest rate of return.
We should also be asking:
Who controls the capital?
Can I access it?
Can I deploy it toward opportunities I understand?
Can it support today's needs while still helping build tomorrow's future?
Can more of the economic activity of my family remain inside our own financial system?
Those are very different questions.
Sometimes the biggest improvement in our financial lives does not begin with finding another product.
It begins when we rethink our thinking about capital itself.
Stay Faithful. Stay Strong. Forge Your Foundation.
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