[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 protected. Tax-free fortress for their families, learn how to keep what you earn and use the velocity of money to create your own private banking system.
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.
[00:00:43] Aric Johnson: Hello, and welcome to Private Banking Strategies with Vance Lowe and Seth Hicks Vance, how are you?
[00:00:48] Vance Lowe: Well, I’m doing great today. How about you, Eric? How you doing?
[00:00:52] Aric Johnson: I’m doing fantastic. Seth, are you with me?
[00:00:55] Seth Hicks: We’re here, Eric. Thank you so much. Glad to be here.
[00:00:58] Aric Johnson: I’m I’m excited because this is part two advanced asked me to do just a brief overview of what we spoke about in the first podcast.
You know, Vance did a great job of presenting and asking some pretty tough questions. I don’t think I got them. All right, but that’s okay. That’s what I’m here for. Um, you guys are talking about the three rules of financial success and in the first podcast. You covered rule number one, which is the 10% rule.
So listener, if you have not heard that go back and listen to that. It’s foundational. It’s something that every family needs to hear and, and you’ll understand why once you listen to it, and then you started to get into principle number two, Seth, can you remind us of what that second principle is?
[00:01:34] Seth Hicks: It’s never spend your principal
[00:01:37] Aric Johnson: Never spend your principal. And I know you guys are going to dive deeper into that today. Correct Vance?
[00:01:41] Vance Lowe: Yes, we are. We’re going to really get into this thing and we want to put a little context to it. A lot of people know that. Banks always get the money back. We always say in many of our podcasts and when we’re making presentations or just talking to people, we have to think differently.
The same thinking that got us, the results we have today will get us the same results tomorrow. Unless we change that thinking. So we are about helping people change the way they think about things and looking at it with a paradigm shift. Oh wow. You know, there’s, there’s a whole new angle. And in that first, uh, of these two podcasts, we were able to show you how you could, rather than pay a bill and lose that $600.
You could get that $600 back and make $600 in your own personal economy, a town, when it talks about principle, the principle for a town is attracting new money. Um, it may have. Resources, manufacturing, whatever, but it attracts new money. And the goal of a town is now to get that money circulating or, you know, from the pharmacy to the medical center, to the automobile repair shop, to restaurants, to whoever, wherever.
And as that dollar floats all around town, every single time it stops. It creates a new dollars or the product or services. We can do that in our own private economies. We just have to learn how. And the banking world, when it comes to principal, they live this role. The masters of making money are banks.
And on a problem is the banks are doing it in such a way that they’re ruining our country. They’re doing it on ethically. Every new dollar that comes back to them, they can lend out. You know, another nine or $10 against that dollar that comes in and that money comes out of thin air. And that’s, that’s a problem.
We can’t do that. And we’re not recommending us do that. But if we ask ourselves the question again, we have to put our brains in gear and think a little differently. How to banks get the money back. Well, the banks are in the lending business now Seth, Aric, unless I missed the day, they gave away free money banks don’t give away money.
Do they? But yet you and I do all day long, almost in every transaction when we let go of the money. It’s because now again, we have to think differently, but it was because that money going away from us became worthless to us. It was no longer seen by us that it could produce more than just a single, unit worth of whatever we bought.
And we have to change that, thinking that money, if we have to go buy something, it’s always now a banker’s mentality. Okay. I need that. But how can I get the item and get the money back? Simple answer is we finance. Every single thing we purchase, we’re always financing. If you don’t recognize that in your own personal life, all the principle that goes away from you, you have financed for the rest of your life.
And, and you have to understand that here’s what happens. That money goes out of production for the rest of your life, which could have earned. What did we say? 20%? Whatever we wanted to attach to it in our own personal economics. We’re going to lose out on that gain for the rest of our lives. Money has to be put to work.
So we’re now getting into some more depth into why principle is so important. And why we can’t spend it, but we can put it to work. One of the first things that Nelson Nash taught me and got me to understand as a very successful money manager, I didn’t know this, that when you put money in an account, a mutual fund stocks or any other investment and try to receive.
A compound, you know, a rate of return for you. You have put that money to sleep because you have to leave it in that account. So if you take it out of that account, it stops earning, right? And so that’s the main reason people cannot capitalize on compound interest. Seth, tell me a little bit about what a penny can do if it’s doubled so many times.
[00:06:52] Seth Hicks: Oh, this was an interesting exercise that, you challenged me with a while back. And we laugh about this now. Aric, I started to double a penny and I was doing the math in my head and I got a double a penny every day for, for 30 days. That was the task Vance said, uh, you’re gonna, you know, it’s going to be a multiple millions.
Uh, almost 5 million or approximately 5 million. I said, so I started doing the math day one day two day three, and I’m at day 15 day 16 and I’m, and I just stopped and, and I scoffed and said Vance. It’s no way it’s ever going to get there. And he said, just keep doing the math. And so I just kept doing the math and doubling it and doubling it.
And by about 20 day, 24 day 25, I started to go, oh, it is going to get there. And the light bulb went on and, and by day 30 you’re you’re like $5 million compounding a penny every day. Amazing. It’s absolutely amazing. It’s it’s the value of compounding interest. Einstein called it the eighth wonder of the world.
[00:07:56] Vance Lowe: Right. And so actually that illustration is in our book and we encourage everybody to download that free copy. You can download it and read it, or you can get the audio version, but Aric, why do you think people don’t get to realize that compound interest?
[00:08:16] Aric Johnson: Well, as you said, I mean, if they don’t have the money in the account, um, or they, they spend it, it’s just not there.
And it’s not something that people have tried to borrow off the 401ks. They’ve borrowed, you know, different monies Once it’s out it’s out. Right. I mean it’s gone,
[00:08:31] Vance Lowe: Yeah, if it’s, it’s out. It’s not producing. So how do we get principle and how do we keep our principle multiplying and producing all the time? So I want to give us a typical example.
Nelson mentions that. And it proves to us that we finance every single thing we purchase. If we save up and pay cash, like our mentors told us that is a strategy and it’s called a get back to zero strategy. We save it up. We then take it to go buy a car. Where does that leave us financially? Zero back at zero.
Yeah. Okay. Or we go finance a car. And we make payments to somebody else and interest. And the problem is we don’t actually pay for the car. We just keep going and getting another one. But that’s only going to get us back to zero. Isn’t it. If we pay it. Okay. So if we sell finance and put our own money to work, things like this can happen.
And guys, I wish I could show you once you enter in and you get interested, we’re going to show you how to compound assets by waking them up. We talked about assets asleep being put in an account. Now I want you to look at and listen to the backside. Of that mutual fund or that stock or that mortgage payment.
Those people have that money and it’s not to sleep asleep to them. It’s wide awake. They are relending and getting more money back. Relending getting more money back. Money has no value. Unless it’s working for the owner. If we put our money in account, it is not working for us. All we’re trying to do is get a little bit of interest, but yet we have to take all the risks.
So let me give you a little story. In an example, let’s say you have a car and you’re making payments on it, and you’re a little more than halfway through and you owe $10,000 on that car. And you actually have 10,000 or more in a mutual fund, that’s sitting idle and you started reading these, this stuff and you start realizing that yeah, my money is asleep by the way, mutual fund, the people who have your money with mutual funds, stocks and bonds, they double your money about on the average, every two and a half years.
And yet the compounding effect back to us, we’re lucky. And we’re not going to net 5%. We’re lucky to net three to 4%. Long-term so let me prove to you. Hopefully I can do this just by illustrating it, but you might want to back this up. We’ll actually show you this. If, if you, uh, take some of the offers that, uh, we have online $10,000, we’re going to move, we’re going to sell our mutual fund $10,000 for a mutual fund, and we’re going to.
Purchase the automobile debt. So we’re going to set up our own bank, our own lending company, and that’s, what’s missing. If we owned a bank in our community or in our economic situation, now everything’s going to circle around our bank. So we’re going to personally lend money to our bank because they have to have capital.
They’re going to turn around and go buy debt. So they’re going to buy. The automobile debt. And I say, I like to use the guy in the mirror. He’s still on the hook. He signed the contract saying I’m going to make all these payments until the payments are done. So all he’s going to get is an address, change, who he makes the payment to.
And so if you get the choice of who you make your payments to, would you rather pay. Your company or keep paying someone else’s company and lose the money.
[00:12:29] Aric Johnson: All me Vance all me.
[00:12:33] Vance Lowe: I’m right with you. So, so let’s, let’s take a look at this now. So the payment, your, your automobile payment is $500 and the interest rate on the loan is eight and a half percent on the automobile payment.
So we have three numbers. Whenever I stumble across this, especially with, with extended family or close friends, the Vance Lowe lending institution will buy up that debt in an absolute heartbeat. We’re just salivating to get that debt. Aric, why would you think that? What, what out of those three numbers would entice me to take $10,000 and buy that debt?
[00:13:18] Aric Johnson: Well, the number that’s coming back to.
