Family banking advisors1 urge us to think of money in terms of cash flow–keeping it moving–instead of cash accumulation–saving it up, storing it in savings accounts, 401(k)’s, 403(b)’s, 529 Plans, and similar “Qualified” plans.

This mentality is very different from what I was taught growing up and throughout most of my adult life.

I’m not going to try to expose the cultural messages that lead us to accumulate. That will be for a different time. What I want to point out here is the difference between cash accumulation and cash flow.

The following lists are adapted from Garret Gunderson’s Killing Sacred Cows, p. 43.


    • Assume and/or teach that . . .
      • Financial security comes from accumulation of money. (The larger your bank account or 401(k), etc., the more financially secure you are.
        Lake full of water.
      • Net worth is the best measure of financial wealth.
      • The foundation of wealth involves reducing your expense by “doing it yourself” and scrimping and scraping as much as possible.
      • Compound interest is the key to growing net worth (and, therefore, wealth).
      • Best “places” to invest: material things and financial “products” and “strategies.”
      • Placing your money where there is a higher risk of loss will, over time, yield higher returns. BUT . . .
      • You can reduce risk (yet maintain high returns) by diversifying your portfolio of investments.
      • Despite your best efforts–and the best efforts of your financial/investment advisors, your investments will be unsecured and uncollateralized (i.e., your money can disappear with nothing to show for it . . . and there’s nothing anyone can do about it).
      • Your goal in life is to save for retirement.

The studious practice of cash accumulation

    • Leads to . . .
      • A scarcity mindset.
      • A focus on frugal–no, ultimately, Scrooge-like, painful–saving . . . or hoarding.
      • An overwhelming fear . . . of ever using, losing, or digging into the money you have accumulated. After all, if you use it, you may run out!
        Beware of using resources! You may run out! Attribution: King of Hearts / Wikimedia Commons / CC-BY-SA-3.0 [GFDL ( or CC BY-SA 3.0 (], via Wikimedia Commons

By contrast,

When you are taught to focus on CASH FLOW
Water flowing

          • You realize that . . .
            • Financial security comes from maximizing your value as a person, your knowledge, experience, relationships . . . and your ability to apply these things in practical ways to other people’s problems. (People pay you to solve their problems! As long as you aren’t relying on force–whether applied through public [i.e., governmental] or private means, your acquisition of money is a sign of noble endeavor on your part.)
            • Positive cash flow is the best measure of financial wealth.
            • The best way to create wealth is to act in the present, working with others interdependently, in order to increase your (and your interdependent partners’!) valuable productivity in behalf of meeting other people’s needs.
            • Increasing the volume or velocity of money movement is the key to growing wealth. (You want to keep money moving as much as possible . . . within reason.)
            • Best “places” to invest: the people behind the products and strategies . . . and in clear value propositions.
            • You want to invest your money where you suffer minimal risk.
            • You reduce risk by focusing your efforts and your investments. (When you are focused, you can actually know something–or a lot!–about what it is you’re invested in. And when you know something, you know where the risks lie.)
            • You want to maximize the number of investments you make in which you are secured and the assets are collateralized. I.e., if the cash flow stops, you can sell or leverage the asset.
            • Your goal in life is to fulfill your God-given purpose: what it is for which you are uniquely suited . . . by temperament, innate ability, talent, experience, learned knowledge, skills. . . . If you are fulfilling that “Soul Purpose” (Gunderson’s term), first, you will maximize your value to society as a whole, thus maximizing your financial wealth, and, second, you will never “retire.” What does it mean to “retire” when you are doing what you love and love what you are doing? You will continue to do whatever-it-is, one way or another, pretty much as long as you live . . . whether you are paid to do it or not.

        When we live life in this manner, . . .

        • We live with an abundance mentality.
        • We are focused outward on maximizing value to others (rather than inward on our needs, our desires).
        • We live life fully in the here and now as well as “later,” when our physical capacities may be diminished.
Security Big cash balance or cash equivalent Maximizing your personal value to others
of Wealth
Net Worth Positive Cash Flow
Foundation Personal Sacrifice: Scrimping, Scraping Action: Increasing Your Valuable Productivity Interdependently with Others
Source of Growth Long-Term Compounding Increasing Volume (Velocity) of Money Movement
Best “Places” in Which to Invest Material Things, Financial “Products” and “Strategies” People . . . and Clear Value Propositions
Higher Returns Require Greater Risk Minimizing Risk
Reduce Risk by Diversification Focusing
Collateral & Security Unobtainable Available . . . and Worth Pursuing
Primary Goal Retirement Fulfill Your God-Given/Natural-Born Purpose
Mental State Internal Focus: Fear of Loss External Focus: Desire to Maximize Value
Actions Because of Mental State Hoarding Living Fully Here and Now . . . and Later

There’s a lot here. A lot to unpack. A lot to cover in the weeks, months and years ahead!

Remember: Always be getting #Ready2Prosper.

1 “Family Banking” is my term for the use of carefully structured high-cash-value, participating (therefore, purchased from a mutual life insurance company), whole-life (not universal or term!) life insurance policies–with paid-up-additions riders–as a means to manage cash. These policies become a tool that permits you to function as your own lending bank.

I should note that only very, very few life insurance agents even understand the concept, much less possess any capacity to begin helping you in this area. And among those who understand the concept, few are even mildly competent. Those who will truly help you maximize your family banking facilities are unbelievably rare. Return to text.