[00:00:00] Voice Over: Welcome to private banking strategies podcast with Vance Lowe and Seth Hicks, your secret weapon to protect your assets and never have to start over financially again, Vance and Seth help, high net- worth individuals, families, business owners, and investors structure, an asset for. Tax-free fortress for their families, learn how to keep what you are and use the velocity of money to create your own private banking system.
[00:00:27] Join us on this journey. As we explore the secret strategies of the rich and political elite in helping take total control of your financial security. Now, onto the show
[00:00:44] Aric Johnson: Hello, and welcome to private banking strategies with Vance Lowe and Seth Hicks. Vance, how are you today?
[00:00:50] Vance Lowe: Oh, I’m absolutely fantastic.
[00:00:52] Aric Johnson: Seth, what’s going on?
[00:00:53] Doing great.
[00:00:54] Seth Hicks: Aric man. Glad to be here.
[00:00:55] Aric Johnson: Yeah, I’m excited. I’m kind of in the dark today. I know that we’re going to be talking about some [00:01:00] rules, but that’s really all you guys have given me. So what’s, what are we talking about?
[00:01:03] Vance Lowe: Aric today, we’re going to talk about some things that just keep on plaguing people. When it comes to money, people will do things with money they would never do with what money buys. Let me give you an example. Would you buy a car and park it on the street for five years before you drove it?
[00:01:24] Aric Johnson: No.
[00:01:25] Vance Lowe: No.
[00:01:25] Aric Johnson: I want to drive it now.
[00:01:27] Vance Lowe: Would you buy a loaf of bread and stick it in the freezer for five years before you ate it?
[00:01:34] Aric Johnson: That’s just gross. I’m just saying.
[00:01:35] Vance Lowe: You see what I’m saying? But people will do strange things with money. They’ll move money and they’ll park it so they can’t get at it They just do strange things with money and we hear complaints all over the place, I’ve worked really hard, I’m not financially where I want to be. And I think maybe all of us can say that and have said that at one time or [00:02:00] another. So today we want to focus on the three main principles, three main rules that make people successful.
[00:02:11] It’s as easy as baking a cake. All right. But if you decide to change up the ingredients, or if you don’t follow the recipe, that cake will never turn out every single time. So that’s where we’re going to go today. And Seth has really helped me clarify a lot of this principle work as we’ve worked together over the years.
[00:02:36] So we’re going to be bouncing off. And go as deep as we want to. And Aric, we’re gonna let you be the pulse here. If we want to further explain a little bit deeper, but what we’re trying to do for our audience out there is to help people change the decisions they’ve made because these three rules.[00:03:00]
[00:03:00] Everybody knows about, and almost in every situation, very consciously people have made choices not to obey them or not to follow them. So let’s dig into this right now. The first rule that everybody needs to know about and follow, it’s called the 10% rule. If I say Aric, what the 10% rule is, do you know what that is?
[00:03:27] Aric Johnson: Is it a, that 10% of the people have all the money?
[00:03:32] Vance Lowe: And it’s probably pretty good.
[00:03:34] Aric Johnson: Something like that. I don’t know which 10% rule are you talking about?
[00:03:37] Vance Lowe: This goes back anciently when we deal with money, we work very hard to earn our money and in order for us to be able to take possession of it, we kind of have to pay everybody else along the way.
[00:03:50] And then. And get possession of them and then we have to live life. Who’s the most important person that we should [00:04:00] pay when we get our take home money.
[00:04:03] Aric Johnson: Oh yeah, it’s ourselves.
[00:04:04] Vance Lowe: It’s ourselves, and the rule is at least 10% and it goes back anciently, biblically. However you want to look at it, but it’s a formula of success.
[00:04:17] And people know about this. Everybody that I asked the question too. Yeah, I know I’m supposed to pay myself first. So it’s important for us to dissect this and find out why we don’t. We want everyone to understand why this rule is so critical and because of maybe the way we think, maybe because of imagination, our thought process, we overlooked some absolutely fantastic earnings situations.
[00:04:53] So let’s go through a few of these things and expound these questions. We’re supposed to pay [00:05:00] ourselves first and it’s supposed to be 10%. Seth, tell us a couple of reasons why sometimes we have to put that behind. We don’t pay ourselves first. We find ourselves maybe at the end of the line instead of the front.
[00:05:15] Seth Hicks: You know, I think one of the reasons people respond and fear and pay things that are the most urgent without implementing a plan. I think sometimes they, if they don’t have a discipline strategy paying themselves first, they do, what’s urgent. They pay for , the car repair, they pay their utilities that happened to double,
[00:05:36] they pay for the air conditioning that broke and, at the end they don’t have any leftover to pay themselves. So that’s one of the things that could be responsible for that.
[00:05:47] Vance Lowe: Let’s dissect this a little bit. Let’s do an everyday life scenario and let’s use the app. Maybe the average American that brings home a $6,000 a month after tax.
[00:05:58] And they’ve heard about [00:06:00] the 10% rule now, and they want to live it. So the first thing they’re supposed to do is write them out a check for $600 and set it on the table. And now it comes time to pay all the rest of the bills. So we start paying the bills with the rest of the money and we get down through this stack of bills and.
[00:06:22] We’re now out of money. But as Murphy laws always, you know, results in one more bill, there’s an unexpected bill here and it is due today and it is for $600. So what are we ever, but what does people do? Honestly, do you think in this situation, Aric, what would, what did you think the average person would do?
[00:06:50] Aric Johnson: We pay the bill? That’s what we’d always done, right? Because you have an obligation.
[00:06:54] Vance Lowe: Okay. So yeah, it’s an obligation. So we would take that $600 and let’s say that bill is [00:07:00] exactly for $600. We would take the money that we paid ourselves to pay the bill. Wouldn’t we? As everybody knows, as they’re listening to our podcast, We’re in the self banking business.
[00:07:11] We’re bringing the banking equation back into our lives. Here is the absolute perfect setup and scenario to make money that we just bypass. So let’s take a look at it totally different. We paid ourselves $600. What was our intent to pay ourselves with this money Seth, what do we do with our savings? What do most people think they should be doing with it?
[00:07:39] Seth Hicks: Some people nest egg it and let it lie asleep. But the prudent thing is to put it to work and keep it moving.
[00:07:49] Vance Lowe: Okay. Seth said the exact words we needed to hear was to put that money to work, to earn more money for the nest egg or for retirement or [00:08:00] for income later on.
[00:08:01] And yet Murphy’s law just handed us the perfect scenario. What if we were to take that $600 and employ that money to pay that bill? So let me change the word employ to finance that bill. Could we set up a repayment structure, Aric, that would fit our budget?
[00:08:28] Aric Johnson: Oh yeah. I hope so. Because like you said, if the $600 bill is a kind of an outlier, but it happens every once in a while.
[00:08:35] Maybe there’s a car repair. That’s not going to happen every month. So I would assume that you’d be able to set up a repayment plan.
[00:08:42] Vance Lowe: Okay. So the goal is to make money on it. So do you want your earnings high or low?
[00:08:50] Aric Johnson: Oh, high, of course.
[00:08:52] Vance Lowe: If you could make 20 plus percent, would you want to do that? So we could [00:09:00] attach an interest rate to our liking and put it there and we could still arrange the actual payment back to ourselves. Whatever would fit couldn’t we?
[00:09:10] Aric Johnson: Yep .
[00:09:12] Vance Lowe: Folks here’s what is so exciting about this, we could have this bill, this $600 working for us at 21% and take 10 years to pay that off. We don’t care how long it takes to get that money back. Cause we’re making 21%. Now, some of our audience might be a little disappointed in 21%.
[00:09:38] So what if we told them it was tax-free there’s no taxable events in this setup.
[00:09:47] Aric Johnson: Sounds good.
[00:09:47] You’re virtually running your own economy. So our job is to put this money to work this 10%, what that means, if nothing else happens in this situation. The only thing that happened is [00:10:00] that we were better off by $600 that month.
[00:10:04] Now let’s say next month happens or in the next three months, another one of those happen, how long would it take to finance some of our unexpected bills to have a pretty good income coming in at a high rate of return? It wouldn’t take very long, would it? The 10% assures us that we will always be headed in the right direction.
[00:10:34] So Seth, can you think any other implications that might have, or any more example that you might want to throw in there?
[00:10:43] Seth Hicks: Sure. The money we pay ourselves is effectively capitalizing our bank, our private family bank, and then we effectively we purchase any outstanding obligation or debt.
[00:10:55] And in this situation, $600 doesn’t seem like a lot. [00:11:00] It could be 6,000. It could be 60,000. And depending on what’s in your bank is what you’re going to use to effectively purchase that debt or obligation. This example with $600, let’s say if you wanted to make 25% on it or 50% you could simply put a note in place from your private bank with a system where you effectively pay your note off every month and accomplish that amount of interest rate.
[00:11:32] And that’s all tax free within your own private economy.
[00:11:35] Vance Lowe: That’s exactly right.
[00:11:37] Seth Hicks: So you control the banking aspect of it, you control, and you really, you’re not losing the money. You’re not losing control of the money and it’s going to work for you in a tax-free system. Am I getting that right?
[00:11:50] Vance Lowe: Absolutely. So Seth, why do people choose not to obey this rule? Do you think?
[00:11:58] Seth Hicks: I don’t think people [00:12:00] may be aware of it to some degree. Or they’re afraid or they’re undisciplined.
[00:12:07] Aric Johnson: I think guys are honestly one of the things that comes up when you ask that question is when families are very first starting out, if they don’t have this discipline in place and realize, the potential that you’re talking about,
[00:12:18] It just becomes a habit, right? You’re paying out these bills. You don’t pay yourself first because you’re concerned or scared about what bill might crop up or inflation that’s going on now. So I need to have this set aside in case gas is going to cost me more. And when you get into a pattern of that, it’s incredibly difficult to break.
[00:12:38] I mean, I’ve been there.
[00:12:40] Vance Lowe: I think we all have Aric, we’ve all been there. We lose sight. And one of the geniuses. From R Nelson Nash, my tutor in the private banking, a whole strategy he had a foresight and a a [00:13:00] way of looking at things, almost like a child. If you look at a young person, their imagination knows no bounds,
[00:13:09] they could be absolutely overjoyed. Or maybe it’s a lightning bolt. Maybe it’s a Thunderclap or whatever else, but they could literally be shocked into terror where they actually fall on the ground, and can’t do anything but cry cause their imagination runs away with them. I think the three of us have learned to curtail that.
[00:13:33] And many times in life it’s to our detriment, we limit, we put stakes in the ground saying, okay, I’ve got the stake, I know how far I can go. I’ll go no further. And the same thing with understanding the flow of money. If people were taught at the beginning through a education process, schooling and everything, how money really works, they would [00:14:00] understand that.
[00:14:00] A better way, an easier way then it just been money one time. So all this first rule is important. Everybody needs to understand it. It’s a question that I ask everybody who comes in and meets with me through an expolatory call. I asked them, are you living, what’s called Parkinson’s law?
[00:14:26] And that law is found in Nelson Nash’s book Becoming Your Own Banker, which is we bring home more than we spend. As long as we’re doing that, then we have that access with that 10% or whatever that will cause us to go in the right direction. He also warns that if you aren’t bringing home more than you’re spending.
[00:14:50] And he puts it this way, go in the backyard, dig a hole, jump in and have your neighbors bury you because you’re going to be a slave to the system, the rest of your life. [00:15:00] And there’s so much financial slavery in America. Only the secret is Americans don’t know they’re in slavery. So that’s rule number one and it’s we’ve got to conquer that.
[00:15:11] We’ve got to pay ourselves first. It’s really easy. It will still handle all your bills. You don’t have to be afraid of not handling a bill. You just need to understand, oh I had that repair, or that doctor visit or whatever else, I might be underwater a little bit, but tell you what I can put up. Even if it’s $25 or less a month, I can finance that bill and have that money working for me and come back into my possession over time.
[00:15:41] I’m not going to lose it. And I put it to work safer than any place I possibly could put it someplace else to try to earn a higher earning. So that’s rule number one. When everybody to understand that and look at that and commit to live, the 10% [00:16:00] law, and I promise you, you’ll always be better off the next month.
[00:16:05] And if you get to a situation like we’ve explained that you’ve got to make choices here, you still put yourself at the head of the line. There’s no more important factor than yourself. That needed to be paid first. So you want to treat yourself that way as well?
[00:16:31] Voice Over: Do you see yourself in that story? Do you feel like you are generating a lot of revenue, but are not moving forward as fast as you would like? Are you ready for help? Please, call private banking strategies said (817) 200-4777. Or visit us at www. PrivateBankingStrategies.com[00:17:00]
[00:17:05] Vance Lowe: Seth, I’ll bet you can guess what the second principle that we’ve got to follow with, what is that?
[00:17:12] Seth Hicks: Don’t ever spend the principle.
[00:17:16] Vance Lowe: I don’t know if people have ever listened to warranty. Warren Buffett’s one of the most successful mutual fund or stock managers ever known. Period. He has been said to know more about the companies that he is investing in than the actual chief financial officers of the companies he goes in and does enough research, and decides where that company is going to go and can literally get them there because he goes in with a team and said, look, we want invest in your company.
[00:17:52] We want it to grow X amount, we want to help you get there. And usually those who accept that help, are big winners. [00:18:00] But he has a philosophy, and also know a little bit about Donald Trump’s backward. And, he’s a very flamboyant individual. Some people like him, some people don’t, but he’s very successful with money. He’s probably the main president that didn’t take any income from his office as president.
[00:18:25] And when he got back four years later, he was worth more than when he left. And they live by this second rule or it’s part of their mantra and in their own lives, Warren buffet says it this way. There are two rules, you cannot break. Rule number one, never, ever, ever,
[00:18:51] and they says that three times, never, ever, ever spend principle. Rule number two, don’t [00:19:00] even contemplate breaking rule number one. It’s that important. So let’s dissect that Seth, can you give us a definition of what principle is and how principal comes into existence?
[00:19:15] Seth Hicks: It’s created from your earnings.
[00:19:17] What you make. One of the things I always say is you have to have a plan in place to keep what you make. And if you don’t, you’re not protecting the asset and it’s going to slip through your fingers, like sand on the seashore. So that’s a part of it.
[00:19:34] Vance Lowe: Okay. Aric, do you have maybe another definition, another idea of what principle is?
[00:19:39] Aric Johnson: Principle is what you have and you can hold onto that’s untouched by uncle Sam and things like that because you’ve already been taxed most likely.
[00:19:48] Vance Lowe: Everybody has that concept, and everybody has pretty much heard don’t spend your principal. But on the other hand, all of the people we’ve trusted in life: [00:20:00] our mentors, our financial gurus,
[00:20:04] all spend principle, they all break this rule. So here’s a good, clear definition of principle. Principle is the money earned by blood, sweat, and tears, and after a government has taken their bite, what comes into your possession, is principal. So that could be from sweating out investments and taking the gain off the table.
[00:20:41] It could be real estate and selling the property and taking those gains. It could be hourly work or salary work, working for someone else. But that money that comes into our possession, is principal. Now, all these [00:21:00] gurus who are very successful with money, say you can’t spend it. So here’s where we introduce what I call the herd mentality.
[00:21:13] Aric, if enough people do the wrong things, if we get enough people doing the wrong thing, does that make it right?
[00:21:21] Aric Johnson: No, it doesn’t make it right. And it’s funny. You mentioned it, I’m not going to derail this, but, study done a long time ago in an elevator where a couple of people were in the elevator and they were facing backwards.
[00:21:33] And then somebody would get on the elevator, a normal person, and then they would go to the next floor. And the next couple people that got on would all face backwards and you could slowly watch the person that was in there riding the elevator, normally they would slowly turn around and face backwards
[00:21:48] because everybody else was doing it, even though you never stand backwards in an elevator, it was just that herd mentality. It was that “peer pressure”. It’s the funniest video to watch, but they just would turn because they [00:22:00] felt so out of place.
[00:22:01] Vance Lowe: Oh, that is such a perfect example. Thank you so much for that. It is the peer pressure. Everybody’s doing it. Okay. And look at what’s happening in our country today. We’re being bombarded by, many false things out there, and the pressure is to do it liberally, 1% or 2% seem to be running our country on ideas and philosophies that just are not sound, but we digress.
[00:22:30] Let’s get back to the principle issue here. How is it that we’re told never to spend principle, but yet that’s really the only thing that will get us through being able to live and survive. And here’s one of the things that we introduced and Seth can give us a little more detailed. Once I outlined this, we only get to spend a dollar one [00:23:00] time that comes into our control.
[00:23:01] And then it goes back to the bank. Let’s take a look at the banks for a minute. The banks always get the money back, no matter what the banks are getting the money back. We as a family unit or an individual unit spend money once and gone forever, and we’ve got to go re earn principle. And so one of the most devastating things, when we spend principle, we have to replace it. Throughout our lifetime.
[00:23:30] If we can build a silo of money and rat hole and put in investments or someplace enough money, then we fall under, what’s called a retirement socialistic program. We think we can retire. And then it’s just, how long will that siphon out of that silo of money last? But guess where it’s going back to the banks.
[00:23:57] It doesn’t have to be that way of the banks can get the [00:24:00] money back. So can we, and so I want to throw out there a little bit of a question and Seth, you can take this from here, if we can show you how to get back a hundred percent of someone’s monthly expenses, would you then be spending principle?
[00:24:24] Seth Hicks: Is that a question for me?
[00:24:26] Vance Lowe: Yeah. Yeah, you or Aric. If we can show you how to get back a hundred percent of your monthly expenses, would you then be spending principle?
[00:24:36] Seth Hicks: No.
[00:24:38] Vance Lowe: We wouldn’t be, but we would put it be happy putting it to work.
[00:24:43] Seth Hicks: Of course.
[00:24:44] Vance Lowe: And we would be doing the exact same strategy that the banks are doing because of it came back to us.
[00:24:52] We could use that money over again, but to hear this and hear us say this, it’s not exactly [00:25:00] what people can think about because there’s some huge missing components. So Seth, expound, if you would a little bit about the use of principle versus maybe spending.
[00:25:14] Seth Hicks: We’re talking about consumptive use versus investment use.
[00:25:19] If you go and you consume the principle, buy things that give you no return on the investment or no return on the dollar. You’re simply using the money and having to earn it again. Whereas if you put the principle to work for you, you’ve got a return on that investment and you’ve got a structured cashflow like an investment property or any other thing, like something that spits out dividends.
[00:25:45] There’s the difference in my mind.
[00:25:49] Vance Lowe: Okay. I agree with that. We really need to understand this second principle that we have to follow, which is never spending principle. So we’ve identified [00:26:00] exactly what principle is, we’ve identified, we haven’t told you yet, but there is a way to use your principle and get it back every single month.
[00:26:15] Yeah. If you set up the strategy, like the banks do to get the money back. So we’re putting the money to work. It’s vital that we put the money to work. We want to go into much more detail. We’re getting to the end of this podcast now. And so we probably want to tell people about how they can contact us and go forward.
[00:26:45] And then we’ll come back in our next podcast. We’ll pick up from where we left off here and dissect using principle and introduce what’s called volume [00:27:00] rate of return, which is how money is really made.
[00:27:03] Seth Hicks: Folks can find us at www.Privatebankingstrategies.com. That’s privatebankingstrategies.com and on the website. You are actually going to be given a gift for visiting us, and that is a red pill book, we like to call it, with a secret that banks don’t like to tell you in a way that you can increase your wealth. And we’ve got a number of valuable secrets in there that people always love to learn.
[00:27:32] Maybe some of our audience is aware of them and maybe some are not, but we offer you that, that book as a gift. We’ve also got all of our podcasts there on the website, we’ve got a number of other resources and blog articles that you can go through and learn about private banking strategies and some of the concepts we’re talking about.
[00:27:51] But yeah, looking forward to jumping into the second episode of this double-header and learning more about how to put this [00:28:00] money to work, Vance, at a velocity of money and volume of rate of return.
[00:28:05] Vance Lowe: Yeah, I agree. I just think if people can mull this over, the first principle and we’ve only barely gotten into half of the 10% rule.
[00:28:14] And we’ve only gotten into maybe the first half of never spending principle. We want to make sure everybody gets this information. So as we bring the second half on, everybody’s ready to receive this information and hopefully they’ll leave the podcast better off than they entered.
[00:28:32] Aric Johnson: Yeah. And I think the most important part listening audiences, this is that you can go and listen to all the different podcasts that these two have done.
[00:28:39] I’ve been on this journey with them for quite a while now. I’m learning things, every podcast, what this does and what I hope that this podcast did and this next one’s going to do is plant a seed, right? It’s going to be something where you’re probably gonna leave this podcast with more questions than you have answers, which is fine.
[00:28:56] But what you’re doing is you’re asking some questions. They gave you some contact [00:29:00] information. You’re going to get contact information on the next podcast as well. Reach out to them. Ask those questions. These guys can really dive in deep when it’s a one-on-one situation. The podcast is educational. It is for you to learn and hear and understand some of these concepts, but they’re just barely scratching the surface or else, this would be like a 17 hour podcast for one of these subjects.
[00:29:20] Please like, subscribe. We’re going to talk about that in a second, but understand you’ve got to reach out, have a conversation with these guys. It’ll be very beneficial. Vance, Seth, thank you so much for your time today. This was fantastic. And again, I’ve got lots of questions, so we’ll be talking.
[00:29:35] Vance Lowe: Thanks.
[00:29:35] Seth Hicks: Thanks Aric.
[00:29:36] Aric Johnson: You bet. And of course, thank you for tuning in and listening to the private banking strategies podcast with Vance Lowe and Seth Hicks. If you have not subscribed to the podcast yet, please click the subscribe down button below this. When we, when the guys come out with a new podcast, it’ll show up directly on your listening device.
[00:29:49] This makes it really easy to share these podcasts with your friends. Again, thanks for listening today for everyone at private banking strategies, this is Aric Johnson reminding you to live your best day, every day [00:30:00] and we’ll see you next time.
[00:30:03] Voice Over: Did this story feel like it was about you. Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get unstuck. Are you ready to take action and get your own private bank? Please, call private banking strategies at (817) – 200 – 4777 or visit us at www.Privatebankingstrategies.com. Thank you for listening to the private banking strategies podcast. Click the subscribe button below to be notified when new episodes become available, the information covered in posted represents the views and opinions.
[00:30:45] And does not necessarily represent the views or opinions of private banking strategies, but content has been made available for informational and educational purposes. Only the content is not intended to be a substitute for professional investing advice. Always seek the [00:31:00] advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment plan.
