Capital Funding - About Banking

How banks make money – and you can, too!

Every agricultural operator should be in two businesses: agriculture and banking. Of the two, banking has the greatest potential of generating long-term wealth.

Banking has been called the most important business in the world because bankers take the responsibility to make money available – always at a profit and always at the least possible risk.

Most of us accept the principle that borrowing money for major purchases can add 50 to 100 percent or more to the cost of what we buy – depending on how long it takes to pay back the loan.

In another view, the average family spends 34% of every paycheck on interest costs that are part of loan payments.

What if that loan profit went into your own captive bank rather than to the commercial bank or credit card companies?  That’s how it works when you are both the banker and the borrower.  All the profit accrues to you rather than to the shareholders of the bank or other lending institution.

The more you borrow, the more your bank grows as you pay back your loans.

Next Step: Capital Funding - Banking Principles