top of page
Writer's pictureÈric Lluch

How to be your own bank

Updated: May 25

Taking the right steps to being your own bank is crucial to accumulate wealth. Think about the following: banks are some of the institutions that have more profits and most of what they do is managing your money. Imagine what you could achieve if you would do it your-self. 

From avoiding any fees related to banks to being able to being able to keep up with inflation, becoming your own bank can help you have more choices and power on your finances and therefore be less dependent on banks.In this guide, I will go through the steps you can follow to learn how to be your own bank and go one step further to financial independence.


To become your own bank, you don’t need to establish a traditional bank but develop strategies to manage your finances. There are two main ways of doing so, but both are based on choosing a financial asset to serve as your bank: cryptocurrencies and dividend-paying whole life insurance policies. 


This guide covers the following steps to being your own bank


How can you become your own bank?


1 Research and shift your mindset


A person researching to be your own bank

  • Understand that being your own bank doesn’t mean creating an actual bank. It’s a shift of mindset in which you can take control of your money, without having to let the banks manage your money for you and therefore avoid the money you might give away by letting them do so. For example, even if no fees are present at your bank, you may be losing money because of having low to no interests, which means that your money is losing value over-time due to the natural increase in life costs or inflation.

  • Realize that you can manage your finances independently rather than relying solely on Wall Street or traditional banks. Nowadays, in this digital world, it’s more feasible than ever to manage your assets by having a computer with a secure internet connection.


2 Choose an asset


Choosing an asset to become your own bank
  • Select a financial asset to serve as your “bank”. Not all assets are equally good for this purpose. 


  1. Cryptocurrencies are digital currencies that operate independently of central banks and governments. They are an ideal financial asset to serve as your bank since they can be exchanged, there are different ways of getting dividend-like profits (such as mining or staking), you can trade as in the stock-market and you can transfer and exchange them with very shorts periods of time any time and day of the year for very low fees. 

  2. Dividend-paying whole life insurance policies are often optimal for this strategy since they’re designed to maximize the cash value growth. They focus on high cash value accumulation and growth, instead of being like a traditional life insurance policy. This is what is nowadays understood as infinity banking.


3. Build your bank


Steps on how to build your own bank

  • You can follow the tips from this website for anything related to cryptocurrencies to build your “bank” tailored to your purposes. You can also ask me for advice via this website or my email beyourownbanking@gmail.com. Alternatively, you can work with an expert to create a whole life-insurance policy tailored to your banking purposes.

  • Build a plan tailored to you. For cryptocurrencies, you can either create your own wallet and generate income there using the staking options. Or you can even use some of the most popular Crypto-exchanges to define plans to earn cryptocurrency by staking it and accumulating rewards or by mining cryptocurrencies using the computational power of your computer. The main advantages of using a Crypto-exchange is that you don’t need to be such an expert on blockchain and cryptocurrencies to be your own bank but you can use their platforms to manage your assets in a much easier way. Moreover, their databases have all the information on your transactions, which is very useful when declaring your cryptocurrency gains in your tax declaration. 

  • If you’re starting with this topic, I would recommend using exchanges, since you can manage your options and assets and the transactions are extremely low compared to traditional banks, with Binance charging only 0.075% for example. 

  • I’ve been using more than 10 Crypto exchanges since I started being my own bank in 2015 and I would recommend the following for having the lowest fees, the highest earning rewards when staking as well as many financial products associated to them (I’ve added an affiliate link for each of them, which will give you from 10 USD, 25 USD or 10% of all my commissions once you sign up) 

  • Nexo, YouHodler, Binance or Crypto.com

  • One of the most important pieces of advice through financial independence was the fact of diversifying.

  • Diversify your assets: You can have assets with less risk associated with traditional banking such as ETFs, pension plans, etc. You can also have some assets associated with being your own bank such as the ones I mention in this guide. And of course, you can even diversify your assets within the bank. For example, you can have some assets that are associated to volatile cryptocurrencies with more potential to growth but with more risk, or you can have some assets that are more stable such as the stable-coins, which are digital currencies that have a constant value following the real currency (e.g. USDT or USDC). 

  • Diversify the exchanges or wallets. By having different exchanges or wallets, you can take advantage of their differences in products or staking rewards since some have some coins favored. You also have less risk of losing money, since the assets are distributed between different wallets and different exchanges.


4. Fund your bank


  • To use your bank, you need to fund it. In the case of cryptocurrencies, you can do this by transferring FIAT money (e.g. Euros or dollars) to your Crypto exchange and then using them to buy cryptocurrencies or stable coins.

  • In case of dividend-paying whole life insurance policies, you can pay life insurance premiums and add funds to the cash value account. You can overfund the policy while maintaining its status as a life policy, always being aware of your limits.


5. Use your bank


  • Once you have built a bank with the previous steps, you will have a diversified set of exchanges or products with their different advantages. Then it’s time to use them as much as possible to get the maximum rewards of each of them to aim for a percentage gain that can keep-up with the increasing yearly life of cost. 

  • Purchase assets using your bank. For example, some of the Crypto exchanges I mentioned (Nexo and Crypto.com) offer the possibility of having a card that gives you cashback in the form of cryptocurrency directly, which is transforming a percentage of your spent € or $ directly into cryptocurrencies. 

  • Distribute your assets smartly by exchanging between exchanges in order to maximize your staking and Crypto rewards. For example, some of the exchanges above offer a flexible staking of your coins for a reward of 8%-12% (APY) annually on stable coins. This means that you can get this reward paid everyday or every week depending on the exchanges, while allowing you to withdraw this assets at any point since they’re flexible reward programs.  


This guide is intended to serve as an overview of the current options to become your bank in 2024 and that’s why it’s one of the first articles at BYO banking. In the next articles, I will go more in depth in some of the different mentioned steps.


Let me know whether you would like more articles like this. Let me know whether any of these topics is of most interest to you and I would prioritize writing an article on them 🙂


I wish you the best in becoming your own bank!


116 views

Recent Posts

See All

Komentáře


💌 Subscribe to FinNotes

"Your emails never fail to make my day."

Become part of an expanding community of awesome readers! Every week, I drop a little dose of inspiration into your inbox—packed with practical hacks to save and invest using new technologies. Don't miss out!

Thanks for submitting!

bottom of page