[00:00:00] Voiceover: 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 and asset protected Tax-free fortress for their families.
[00:00:21] 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 and help you take total control of your financial security now on to the show.
[00:00:46] Aric Johnson: Hello and welcome to Private Banking Strategies with Vance Lowe and Seth Hicks. Vance. How are you doing?
[00:00:51] Vance Lowe: I’m doing fantastic. All
[00:00:52] Aric Johnson: right, Seth. What’s going on, my man? Hi,
[00:00:54] Seth Hicks: Aric. I’m glad to be doing another podcast for our audience. Glad to be here.
[00:00:59] Aric Johnson: Yeah, me [00:01:00] too. I’m excited. Today you’ve got a title on this one, and it’s in quotes, but I can get a higher rate of return.
[00:01:06] What is
[00:01:06] Vance Lowe: this all about? . You know, When we start introducing this private banking strategy to people and they start learning about it, I call it pigeonholing information. We can only react based on our own experience when it comes to money. We’re pre-programmed, oh, if this happens, this is what I’m gonna do.
[00:01:24] I’ve heard about this, I’ve heard about that. It’s also called in Nelson Nash’s book, the Arrival Syndrome. When you hear something you categorize it. And so through this process we always get people thinking well, I can get a higher rate return than doing banking. And they verbalize that to us all the time.
[00:01:45] Nelson got that back when, before he wrote the book, becoming Your Own Banker. And so we’re gonna talk about that. This is in his book, becoming Your Own Banker, the fifth Edition on page 69, and I think 70 [00:02:00] for those who, really wanna read through it, we’re gonna highlight it.
[00:02:03] We’re gonna talk about the idea. So we want to put, to rest this question, I can get a higher rate of return in X. We’re here to tell you, you cannot if you ignore the financing or the banking equation, and we’re gonna hopefully approve that in the podcast today.
[00:02:27] Aric Johnson: I, I gotta just, jump in here Vance, because anybody who’s been watching the market in the last year, Doesn’t that kind of prove it already?
[00:02:34] It’s been turmoil and it’s not good and it’s down. And I don’t know anybody who can say, oh, the market’s gonna beat anything at this point.
[00:02:45] Vance Lowe: I think this will be timely for people, yeah. They’re getting scared and they want to know where can I put money, grow it, but without taking risk.
[00:02:54] Absolutely. And Seth, we talk about this all the time, private banking strategies, what’s our [00:03:00] motto? What’s, what do we tell people about, you know, that are really worried about money?
[00:03:04] Seth Hicks: This is a, it is a banking system. It’s a way of life. It’s a long-term system and strategy to preserve your wealth, keep your wealth to grow and compound in a tax-free environment.
[00:03:16] And we’ve got a number of podcasts where we really drill down on how this is the Tortoise and the hare type example. And as you implement this strategy in your life, whether you’re already very wealthy or whether you’re not wealthy and you’re incredibly overwhelmed in debt, the system can work for you and it will outperform.
[00:03:39] Any type of other investment, traditional stocks and bonds type investments, and that’s whether it’s in a boom or a bust. Aric, to, to your question, you said the markets are tanking. Yeah. And peop people are afraid. Especially those baby boomers are counting on their investment portfolio to [00:04:00] provide for their retirement and when it takes a hit, they begin to get nervous and couple that with the
[00:04:06] purchasing power of the dollar being cut in half and the, what some call hyperinflation. I think everyone would agree that there’s an inflationary effect going on to the printing of money that’s occurred over the past decade if not two decades. And , all those factors converging create a perfect storm.
[00:04:25] And so we, our position, and we think it’s a very well founded one, is that with the private banking strategy system in place, you’re gonna far outperform and far out secure your wealth. In a banking system, and we’re gonna put some pencil to paper and some numbers here for folks and try to help explain that in further detail.
[00:04:48] All right.
[00:04:49] Vance Lowe: All right, so let’s, let’s kind of get into this a little bit now. First of all, we’re not gonna be addressing yield of an investment. We’re discussing how to finance everything [00:05:00] we buy, and I need to pause here and I need to teach a concept. So I call it a freebie for everyone. It’s worth a lot of money and uh, sleepless nights.
[00:05:12] If we ask in the market any financial questions, if we ask the wrong questions, we’re gonna end up with wrong information. And yet we make decisions on those and we wonder why we lose money. So there is a difference between yield and average rate of returns. And the banks, wall Street stock market all have programmed us to ask the wrong questions and look at the wrong information.
[00:05:44] And that’s called average rate of return. So I’m gonna blow the lid off of this right now because I’ve been a money manager and, and dealt with this virtually all my career. The effort created return is a mathematical [00:06:00] formula. Of numbers. It has nothing to do with the actual amount of money in an account.
[00:06:09] Lemme give you an example. As a money manager, you, Aric, lend me, or you have me manage a hundred thousand dollars the first year. I double that. As a result, the second year I lose 50%. The third year I gained 25%, and the fourth year I lose 12.5%. Now if we’re really good with math and you’re able to follow along here, the question is how much is in your account at the end of four years?
[00:06:39] If you did the math right, you’re about 109. Thousand plus. . However, guess what I get to put in this prospectus and advertise as the average rate of return for that investment over that four years. It’s exactly a 25% annual [00:07:00] rate of return. However, if you would’ve asked the right question, what is the yield on this account?
[00:07:10] I would’ve told you 2.34%. Now how likely are you to buy that investment?
[00:07:18] Aric Johnson: Yeah,
[00:07:18] Vance Lowe: that’s a big difference. Yeah. The average rate of return entices people to buy, but it’s meaningless. Yield, on the other hand, is money put in the account that cannot be reversed. Okay. Banks, for instance, when they talk about yield in your account, they can’t reach in because of bad earnings and take money.
[00:07:43] Okay, it’s called yield. Yield is your money in the account, and everything that private banking strategy does is all about yield money coming in that cannot be reversed. With [00:08:00] that, let’s get into this little bit. If we’re financing everything we buy, let’s demonstrate but I can get a higher rate of return.
[00:08:08] So let’s take and demonstrate client A. He invests a hundred thousand dollars for one year. At the end of that time, he earns 20% or $20,000, so his gross yield is $20,000. Now we have to, of course that’s, you know, earned income. It’s a one year’s worth, so it’s not capital gains. So we’ve gotta pay taxes.
[00:08:35] And so the average we’re gonna say is a 30% tax bracket. So there’s $6,000. So his net yield is $14,000. . Now we’re gonna compare that with the banking strategy. Client B has built up cash value in his policies of a hundred thousand dollars in his private banking strategies plan. [00:09:00] He then borrows that money and makes the exact same investment.
[00:09:06] Only when he borrows the money he’s has to pay 8% interest on that money. And he makes the same return over that year’s time. So lets do the numbers there. The gross return would be $20,000. If it’s 20% on a hundred thousand dollars investment, minus the interest paid, cuz we have to be fair here of $8,000.
[00:09:33] Okay? That leaves a taxable gain of $12,000. Minus Taxes on ordinary income, we’re still gonna charge the 30%. That would be minus another $3,600. So his net yield is $8,400. And everyone stops there. This is where we make the fatal error. [00:10:00] Who owned the financing company? They did. They did. Client B did, right?
[00:10:09] So here’s the real results. Here’s how you have to look at this. The net yield from the investment was the $8,400. The net yield from the banking system was $8,000. So the total yield after taxes, 16 four versus 14,000. Now who’s the winner?
[00:10:33] Seth Hicks: Yeah, you gotta, you’ve gotta think of that also as we’re talking in the client A who invests a hundred thousand dollars and earns 20% that year.
[00:10:43] That’s a boom, that’s a boom cycle. Yes. Most folks that are in the market now, I would love to see their portfolio indicate, a 20% return a year. It’s not there. And so thi this is comparing. Just a regular financing through private banking [00:11:00] strategies to a boom year. Mm-hmm. .. So if you compare it to a bust year it’s gonna be a multiple return in the banking strategy versus the investment.
[00:11:10] Yeah,
[00:11:10] Vance Lowe: exactly. But here’s the takeaway, guys. This is what everyone has to remember. This principle applies to any investment you make. So there’s no way a person can get a higher rate of return by ignoring the banking process. It’s impossible. Aric, what do you think about that? You think that’s true?
[00:11:31] Aric Johnson: It’s fantastic. Yeah. The numbers are there that it’s pretty clear.
[00:11:34] Vance Lowe: Okay. So it goes back to the beginning of understanding money. It’s not about what. Don’t know about money that’s hurting us. We all have assumptions and you know, once people realize that the way they think about money, if it’s incorrect, is their biggest doubling block.
[00:11:55] So we have to ,, correct ourself every now and then. There’s a [00:12:00] delay though, to be honest. There’s a delay in the banking system. Remember, we have to accumulate the cash value in our system. . So that takes a little bit of time, but it is a single event. Once that’s accomplished, you’ll never look back.
[00:12:17] So we, we need to understand that a little bit and we’re gonna go into additional podcasts later on that describe our policy a little bit, generation stuff and uh, a few things like that so that can get a better grasp on just, what they’re doing and how they’re doing it.
[00:12:35] Setting up a new policies, like setting up a company. But let’s let’s stay with the point here. The point is that this banking strategy, This banking contract that we use to put money in to store until we can put it to work. It works like a trust. People need to understand and know what a trust is and many [00:13:00] times a trust is oversold.
[00:13:03] And Seth, you’re the man to kind of speak to this. Tell us how, what, what the structure of a trust is in this situation and why it might be good and why a life insurance policy might be structured like a trust.
[00:13:19] Seth Hicks: The in the sense that you’ve got a trustee managing the asset life insurance company is managing the cash under their control and these life insurance companies that we use to structure.
[00:13:33] Private banking policies have never failed to pay a dividend in over a century, and some of them closer to two centuries. And that’s through the Civil War, the Great Depression, and every other economic downturn. Un unlike, having a financial manager that could mismanage things, these life insurance companies have stellar a plus performance records.
[00:13:56] The system of having a, a [00:14:00] beneficiary and the ownership in the name of a trust ho holding the policies is a common structure that we use a common structure that people like to use, especially in a generational waterfall. Type of wealth building such that a grandparent may have policies on children and grandchildren where a grandparent is the trustee of the trust and has access to cash and is able to put that.
[00:14:24] Cash value to use in the things that they invest and purchase. And in the, when the the grandparent passes, the trustee ship passes to the child. And like I said, if the insurance policy is on the child or the grandchild, the policy’s still in effect. So then, the Trustee of the trust, now the child has access to that cash and can put that cash to work for an investment into the things that they finance.
[00:14:55] And when the child, who’s also the parent of the grandchild [00:15:00] passes, then the trusteeship passes to the grandchild and the grandchild. Now has a policy on their own life, but they’re the trustee of this trust that it’s accumulated great wealth over this time period because of the accumulative tax-free value that’s coming into it.
[00:15:16] And now the the grandchild has use of the Cash availability in that policy and is able to invest and finance the things that, that they that they invest in through their private bank. And then likewise, when they pass, then the death benefit kicks in and dumps into that trust. And the next generation has a large corpus sum to participate in the banking strategy.
[00:15:44] And that’s a good demonstration of how this waterfall wealth legacy is created. .
[00:15:50] Vance Lowe: It really is, and that’s a great explanation. I really appreciate that. In order to understand money and the volume of [00:16:00] money versus interest rates, we’re really into volume rates of return. Where is it best to put our money?
[00:16:09] We’re not opposed to, investments out in the market. As long as people feel like, they’re gonna make a gain, but we don’t wanna bait the farm on it. One of the fads that I’ve seen throughout my lifetime is switching from very conservative to new High risk investments. Even the life insurance is caught up in that.
[00:16:33] We’ve gone from whole life insurance. It made a complete flop in the seventies to term okay, by term invest the difference. And then that was a fad created by A.L Williams and now it’s another company. I think it’s Prime, primemerica.
[00:16:50] Voiceover: Do you see yourself in that story? Do you feel like you are generating a lot of revenue but are not [00:17:00] moving forward as fast as you would like? Are you ready for help? Please call private banking strategies at (817) 200-4777 or visit us at www. Private banking strategies.com
[00:17:27] Vance Lowe: Changing the risk to the client, which are universal life insurance contracts. It can be indexed or it can be variable, or it can be fixed. But they’re all much higher risk. They’re much they’re, there’re things that we can’t bank on when we’re at age retirement. . So a little bit of, that’s fine.
[00:17:54] Seth got me into crypto a little bit a few years ago for me to kinda learn about that. [00:18:00] And I have a motto there as I only want to invest the amount of money I can lose. , and not hurt me. So I hope that this podcast is telling people and trying to explain to people. That if they don’t have the banking equation in their life and they’re not using their own banking equation, someone else is making that money, someone else is gonna make that money on their investments and everything else.
[00:18:29] So I think this is a critical issue. That people need to look at, they need to understand. And we encourage every person, we try to give out as much information as we possibly can to the average public. We give out information that the banks don’t want you to know. And we do a lot of publishing of these ideas so that you, the listening audience [00:19:00] might have.
[00:19:01] Something, click and you’ll investigate a little bit further. And so we really hope that you’ll look at this. Aric, what else have I missed? What have I gone over too fast that our listening audience, we might need to clarify.
[00:19:14] Aric Johnson: No, I think you did a great job. I do have one question though, and you’ve shared this before, Vance having multiple policies, you shared that you have multiple policies out there.
[00:19:22] So as a grandfather, that was your example, grandfather child and grandchildren. When the grandfather or grand grandparents pass and it’s in a trust, the death benefit from their own policy that they have on themselves, that goes into the trust. Correct?
[00:19:38] Seth Hicks: It’s gonna depend. It could, it depends on how you structure it.
[00:19:42] You may have policies whereas like the grandfather is the decedent and the death benefit is paid to his wife. As for continued living expenses. Okay. Yeah. And then let’s say the grandmother passes and the beneficiaries are, [00:20:00] children to, to them one, two, and three. Or it could be in a trust.
[00:20:05] It depends on how things are structured. It depends on each particular family’s goals and what they’re trying to accomplish. But multiple policies can be held in the same trust. They can be held in different trusts. You can Have a comprehensive strategy that really covers all the bases.
[00:20:22] You could have a policy that covers grandmother in the event of grandfather’s passing and vice versa, a policy that covers grandfather in the event of grandmother’s passing and so on.
[00:20:34] Aric Johnson: So let’s say this let’s say it’s the last grandparent to pass away. And they have it in a trust, and the trust is the beneficiary.
[00:20:42] Do you encourage the person who is now in charge of the trust the children, I would assume, do you encourage them to then use that money to seek out and buy other policies?
[00:20:54] Seth Hicks: It really depends on their own individual needs. Got and circumstances got yes. Some of the [00:21:00] money could be further funding into policies so that they have that compounding effect over the long term, and they’re able to.
[00:21:07] To start policies off with a generous principle contribution upfront. And in some of the illustrations we’ve done before, if you have even $5,000 contributions for seven years. In the Twin Sisters example, we have multimillion dollar of. Facts on both cash value and death benefit at the end of that.
[00:21:27] And folks can go back and visit the Twin Sisters episodes. Yeah, it’s a double podcast where we illustrate two sisters with plans, one which contributes $5,000. To her private banking system for I believe seven years and the other to a CD. And at the end of their lives, the CD sister has about $250,000 to pull down on, or $50,000 a year for five years.
[00:21:52] And then she was destitute and the other sister had $50,000 to pull down for the rest of her [00:22:00] life. And then she left a a mil, a seven figure death benefit. So consider. Starting that same run with the initial policy formation of a hundred thousand dollars, a year for five years.
[00:22:13] you don’t have to be a calculus mathematician to figure out this’s gonna be a lot more Yeah. Than seven figures. That’s the the answer to your question, but it’s really gonna depend on each family’s needs. , it’s gonna depend on how active the children are in the banking system.
[00:22:28] Some, maybe sometimes one child is a banker and he really wants to participate in this. And the others think that they know more than a granddad and their siblings, and they don’t. They want to go, do something their way. They’re not gonna obviously be a candidate for taking over the trusteeship of the trust.
[00:22:45] Yeah. And implementing the strategy. So it all really depends. on, on your family structure and system and what your goals are. And, but you have the idea or the concept correct, that there, when the death [00:23:00] benefit is paid, there’s a corpus there to utilize and whether that’s you can get it into premiums over a number of successive years.
[00:23:08] You can utilize some for cost of living just things that you need to deal with. You just have to analyze everything that’s on the table at that time, but we commonly use that dump in of death benefit to fund further policies. Yeah, and for the same effect and reason as we analyzed in the Twin Sisters.
[00:23:28] Vance Lowe: Aric, I also wanna mention, you asked a question that is commonly asked. At this point, people are asking, how do I keep this going? How do I, capitalize on. On this, it’s long-term strategy, so we’re actually gonna cover that in our next podcast. Alright. We’re going to show how this is perpetual generation after generation and how that is set up and how the younger generations learn and [00:24:00] how that is pre-funded.
[00:24:01] And it’s just like Seth is saying, it can be, any number of ways. It’s just based on the family unit. But this is also, that will also be from Nelson Nash’s book, and we’re gonna speak to his idea. And it would be the ideal that I’ve watched his family, Nelson died a couple of years ago.
[00:24:22] and he purchased insurance on every single child. That of his, he purchased insurance on every single grandchild and required the parents to purchase insurance on each of their kids. And grandkids. And Nelson purchased insurance on every one of his great grandkid. Wow, that’s awesome. So this generation for sure, we’re yeah, that’s really something because my goal in life is I’m, I’ve told people all the time I’m, I’m a conscious incompetent
[00:24:56] I know I don’t know everything, but I’m learning. And I always [00:25:00] have, I have this little picture on my mirror when I wake up every morning. Learn something today about private banking strategies. Look, I’ve, my whole life is this, and it’s a challenge for me to learn something new, but I learned something new this morning.
[00:25:14] And we’re gonna share that in the next podcast.
[00:25:17] Aric Johnson: all right. Well, I know I ask this every time, but it’s because you guys are constantly getting new listeners. So how do they get ahold of more information if they wanna learn more? .
[00:25:26] Seth Hicks: Well, The first place to start Aric, is on our website, private banking strategies.com.
[00:25:33] That’s private banking strategies.com. And for our guests who visit us there, we offer you a a free book, which we call What the Banks Don’t Want You to know. And therein we lay out some things that most people first being introduced to these concepts aren’t aware of and how. The banks profit off of them.
[00:25:52] A number of other golden nuggets in that, and it’s free. You can read it or you can listen to it in an audio download. And from there you will [00:26:00] receive emails from us, which we continue to educate our audience on and spot issues that help to educate them. If you listen to our podcast and you’ve read that book and you’re resonating with this content, it’s something you wanna pursue further.
[00:26:14] You can schedule an exploratory call with Vance. And ultimately where that leads to if you continue down the path, is to where you put in your own financial numbers and circumstances. And Vance conducts an eight year analysis, which is a roadmap in effect that shows you how this will work for you.
[00:26:34] uh, who you pay when you pay. And a very detailed roadmap of how your wealth will accumulate and how it values you and your family to kick it off. And that’s called the eight year analysis. So tho those are the steps.
[00:26:48] Aric Johnson: All right. Sounds good. Gentlemen, again, thank you so much for your time. Thank you,
[00:26:53] Vance Lowe: Aric.
[00:26:53] It was a pleasure being here. It was great.
[00:26:55] Aric Johnson: You bet. And of course, our last thank you is always to you listening audience, thank you so much for [00:27:00] 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 now button below this way.
[00:27:08] When Vance and Seth come out with a new podcast, it’ll show up directly on your listening device and we humbly ask that you share this podcast, read it and leave a review is this actually does help others find the. Again, thank you so much for listening today. For everyone at Private Banking Strategies, this is Aric Johnson reminding you to live your best day every day, and we’ll see you next time.
[00:27:32] Voiceover: Did that 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 [00:28:00] www.privatebankingstrategies.com.
[00:28:02] Thank you for listening to the Private Banking Strategies podcast. Click the subscribe button below to be notified with new episodes become available. The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of private banking strategies.
[00:28:18] The content has been made available for informational and educational purposes. The content is not intended to be a substitute for professional investing advice. Always we seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.
