Voiceover: [00:00:00] 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.
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.
Aric Johnson: Hello and welcome to Private Banking Strategies with Vance Lowe and Seth Hicks – Vance. What’s going.
Vance Lowe: Oh, it’s just a beautiful day today.
Aric Johnson: Ah, nice. I’m, I’m excited because I know the topic. I, of course, I get some notes ahead of [00:01:00] time and, uh, I know what you’re talking about. You’ve kind of talked to me about this off air before.
We won’t get into that today, but I’m excited about this story. The, we’re talking about a grocery store story, and Seth, you and I are kind of gonna be sitting here listening and, uh, you, you’ve got a lot of comments to, to help Vance along the way, but Vance, let’s get into this, .
Vance Lowe: All righty. You two are gonna provide the expert analysis.
Aric Johnson: Okay. . Oh boy. You’re expecting a lot there. Vance, but I’ll, I’ll try my best. Seth, he was talking to you, . .
Vance Lowe: Okay, folks. We, I’m excited about this because things about the. Private banking strategy world revolves around basic techniques. One of those basic techniques are setting up and running a business. A lot of us out there, you know, have always shied away from running your own business.
Oh, I could never do that. It’s too complicated. But in fact, running a business is no [00:02:00] different than running your personal life with your family. . As a matter of fact, if you introduce a few extra principles, your family will prosper far better than, uh, it probably has in the past. So the best way I can explain this and um, my resource material today is from our Nelson Nash’s book, becoming Your Own Banker.
If it’s the fifth edition, you can find it on page 15. But I want to go through this because this is the crux and this is what he is saying. If you can understand how a business works, you understand the private banking strategy, they go hand in hand. Okay? So I wanna start that process here. If we’re gonna start a business, And we’re gonna start this strategy.
We have to understand that we [00:03:00] are going to be both the consumer and the seller of the same thing. Seth. Seth, what does that mean? What do you think that means?
Seth Hicks: Uh, Well, I, I don’t know the way that you have phrased it, uh, but we are the the operator owner, and we are, which is the lender, and we’re also the user of the funds, which is the borrower would, would be my paradigm for it.
Vance Lowe: Okay, great. We’re going to use a grocery, Story here today because it fits all the requirements of what we’re looking for. So let’s say we’re going to start a business. What do we have to know? What, what, what is part of the pre-planning? Aric, what would you think if you were gonna start your own company or your own business and if it was a grocery store or not, what do you think you would have to have up in your head or, what would be your preparation do you think?
Aric Johnson: Oh, I gotta [00:04:00] find location, location, location. So that’s number one for me. I want a good location and I need something big enough to supply what the needs are for the public and myself. Right? So if, if you said grocery store I needed something that’s gonna be large enough to house all the groceries that people are gonna possibly shop for.
Vance Lowe: Okay, good. And then we’re gonna have some have to have some expertise in that, aren’t we? Oh yeah. And so most people go into business because they’ve been in that form of business as an employee or someone, uh, under top level management or something. But they know how it runs. They know how it works, and they’ve gotten the idea, I can do this.
I can do this on my own. And so they do the research, they do everything. It’s gonna take, and you’re right, there are some certain things that we have to have. The first thing is if we’re gonna be a grocery store, is location. The next is location, and then location. . Yep. So because [00:05:00] people have to have a place to shop that’s convenient.
It’s really close to them. Well then the next thing they look for, and the next thing we have to have is probably a building that is really neat, tidy, sharp, professional so that people, when they come in, Hey, wow, this is really taken care of. This is the state of the yard or whatever else. and then they have to come inside the store and they have to see the same thing.
They have to see, wow, these are fresh products. They’re displayed well, and the price is low. Now all this is gonna cost money, isn’t it?
Aric Johnson: Yeah.
Vance Lowe: It’s gonna cost a lot of money, and so we have to be prepared to come up with that kind of money. But because we don’t have that money probably on hand, we’re gonna have to probably go deep into debt, have to find a banker who will supply us, come up with our own, uh, [00:06:00] collateral or whatever else to satisfy the bank and, uh, use someone else’s money to start this process.
So once we understand, What we’re doing, how we’re gonna do it, how we’re gonna put it together, and we build it. The next thing that we have to understand is that there’s a difference between the back door and the front door. If we understand that process between those two, we can make a very good living with a grocery store.
Let’s just start and analyze one product in a grocery store. I’m sure there are thousands and thousands of different products. Let’s talk about a canape, and this is probably has nothing to do with what the price is today because inflation has just gone nuts. Mm-hmm. . [00:07:00] But back when the book was written, it cost, uh, you could buy a can OFE for 60 cents.
Is little known is that it costs the store 57 cents for that canape. Why do you think it’s such a low margin? Seth? Why do, why do you think grocery stores operate with such a low margin? ,
Seth Hicks: I would think they have to be competitive. They’ve gotta keep, uh, margins low to be able to be competitive in the marketplace.
So the person doesn’t go down to the next local grocery store and buy there?
Vance Lowe: Exactly. Okay. So the canape sitting on the shelf represents inventory, inventory. And a business has to turn over. And in this case, we have to turn the inventory [00:08:00] 15 times a year in order to break even. So Aric, gimme your spin on that.
Why do we have to, you know, roll our inventory?
Aric Johnson: Well, e especially with low margins, you’ve gotta, you’ve gotta basically sell in bulk in a way, right? I mean, you’ve gotta have a lot of people coming through the door, a lot of products being purchased so that you have, you know, all those small margins need to add up to a large amount just to pay all the bills, the electricity, the employees, all of it.
Vance Lowe: Okay, so you hit it right on the head. You’ve got attorney’s fees, you’ve got interest, you’ve got the employees, okay? You’ve got the cash registers. You’ve got all the expense just to turn the lights on for a store that you have to be able to come up with. And so by turning inventory 15 times, it’s only a breakeven.
Good news is if you can turn it 17 [00:09:00] times, you’ll make a profit. Okay, so there’s some magic here that I, I wanna e evolve in and I’ll, I promise guys, I’ll turn this into the banking. Really, really sweet and nice. But Nelson put this story in the book for a special reason and I want to, and we’ll, we’re gonna hit on that.
So if we can turn inventory 17 times we make a profit, if we can turn it 20 times. We can retire early and at 20 times something magical happens. And to find out this ma magical stuff, I wanna talk about water. Now we have to assume we’re at sea level. If we heat water up at sea level to 210 degrees, what do we.
[00:10:00] Hot water. What? Just water. Nothing more. Aric, what happens if we heat it to 212 degrees?
Aric Johnson: Well, I’m, I’m a little . I’m a little far outta school, but I think that’s right around boiling .
Vance Lowe: I hope , just checking your mouth.
Aric Johnson: Okay. Is it, tell me I’m right, please. .
Vance Lowe: So it boils, which creates steam. And now we have all kinds of power.
You know, the steam engine was created, there’s unlimited power at our hands when water boils. And so in business we have to understand and know what that boiling point is. What is that magical part where our business just takes off for a grocery store? It’s. Rotations of inventory per year because it [00:11:00] jumps from 20, could go to 30 and could go to 40 within the year, within the next year.
There’s all kinds of things that happen once we hit the boiling point. So, That’s important for us to understand because it affects all kinds of businesses that we’re in in the past. Working with uh, people in the sales industry and, uh, people in new business trying to get them to understand this part.
You know, we put in 85% of the effort, we’ll put in 90% of the. And we just, we’re just not making a click. And little do we know, we give up and we only needed 2% more. We only needed just to add a little more heat. before the magic happens. So we have to discover that it’s very, very critical in every single business.
I wished I’d have known this earlier because when you start a business to try to teach people and [00:12:00] have them plan, you’ve gotta find this boiling point you’ve gotta find when your business activity will really let you take off. Okay? We’re gonna assume in this grocery store that this is a guy That owns the grocery store and he has a family, well, his spouse is gonna come in and buy groceries.
Now she’s got a cart full of groceries. And the whole idea here is, as people come in and fill up their, uh, shopping carts, they go to the front of the store and they go to the cash register checkout and go out the front door. Once that item is sold, we gotta. Stock the shells, buy, you know, the inventory again and bring it in through the back door.
But the question I have Seth, and you can answer this, if my spouse comes into to the grocery store that re owns, fills up her grocery, uh, cart, which door [00:13:00] is she gonna go out of the front door or the back?
Seth Hicks: So I think she should pay for the groceries and go out the front door.
Vance.
Vance Lowe: Yes, she should. . But what is the common practice with cell phone businesses and a grocery store is, is really prevalent that they actually go out the back door because it’s their store. Right? Right. And if they go out the back door, Aric, what’s gonna happen to that?
Uh,
Aric Johnson: More family members are gonna wanna go out the back door.
Vance Lowe: Oh, not only family members. Yeah, but they’re gonna be seen by the hired help, aren’t they? Mm-hmm. True. Yeah. And entitlement. Starts to kick in. Mm. Now I can’t tell you how devastating theft is. Uh, Seth hit it or started to alluded [00:14:00] to it right up front or a few minutes ago. If one canape are stolen, it takes 20 cans of peas sold to replace one that has been stole.
that store can never reach its potential, but yet because we are the owners, we feel entitled that we can do anything we want. And so we end up taking, you know, our groceries out of the store and wonder why we can’t be as profitable, uh, as possible. So what I want to try to do is explain. A different rationality of why people go out the back door.
And I think you too will agree with me so that everyone else can understand. Every time we go into business, we end up having a silent partner.[00:15:00]
Voiceover: 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 at (817) 200-4777 or visit us at www.privatebankingstrategies.com.
Seth, who’s our silent partner? Do you know? Silent?
Seth Hicks: I don’t know Aric. My what? Okay. . We’re all gonna learn something here today. Our silent partner is the irs. Oh yeah. In business, they want part of the profit. Right. Always. And so if [00:16:00] a store makes more money, the silent partner’s gonna make more money, right?
So if I take my groceries out the back door and don’t have to pay for it, I don’t have to declare that as income, right? It’s a very polite way of describing theft. Hmm. And it is so, so devastating. But the i r s is such a horrendous problem for all of us, our society, everything else. Suppose we could set up a situation that the prophets from the sell of our groceries were not subject to su income tax.
Would that make life better?
Aric Johnson: Absolutely. If we didn’t have to pay income tax. Yeah. Heck yeah. .
Vance Lowe: Okay. Thus, we’re going to introduce what’s called a private banking strategy. Okay? We’re gonna operate a business, we’re gonna bring outside money in. That [00:17:00] is after tax. Uncle Sam’s gonna get his fair share, but once it’s inside our control, the profits from that point on.
Will be taxed advantaged. Okay. So in a family owned business, if we have controlled customers, all of our family, all of our extended family that’s close and even some others, and they’re required to shop at our store. and they don’t even get any discounts. They don’t get the coupons or anything else. Our store’s gonna be very profitable, isn’t it?
Mm-hmm. . With that, we’ll be able to buy more product and sell more volume, in this boiling, um, scenario to be able to be profitable and have a business that will sell at [00:18:00] a much higher. Than another store who is, has been taking, um, stuff out of the back door all along. So if we could create that environment and get rid of our silent partner, things are really gonna change for us.
So the whole purpose of putting the grocery store story in Nelson’s book was that if you can understand how the grocery store works, You can understand banking easily because banking is a whole lot easier. You don’t have to worry about location. You don’t have to worry about employees, which means you don’t have to worry about worker’s compensation and all these rules and regulations that come down to business owners.
Because everyone in government likes control [00:19:00] and it takes the control and the profitability away from you. As a matter of fact, you don’t even have to have liability insurance. on this strategy. Mm-hmm. . So this is why he’s put in here that it’s so important to, uh, be able to know how businesses work.
Everybody should understand that. And th these are basic things that should have been taught in school you know, from kindergarten all the way through a master’s degree that have been taken out. The grocery stores. If you’re gonna run a grocery store, the only experience you’re gonna get is you gotta go to a grocery store, you gotta be hired by them and work for them and figure it all out.
And that’s how it’s passed down. Um, unless I’m sadly mistaken, there are no schools to teach you how to run a grocery store, or your own personal economy. And so [00:20:00] I think this makes great sense. I think it makes. Things clearer on the path that we’re trying to do on the banking side. If we can control the money, if we don’t steal from ourselves, the person looking back at us in the mirror is our client.
We are the investors. We create the bank. We lend money to the bank. The bank then buys debt. and lends money to the client so that they can live and go to work, and then pay back into the system. And it’s a velocity system that returns money over and over again. So guys, I just wanted to share this story with.
and Seth, I’d like to give you a little bit of time. I’ve been doing all the talking here, but along with the grocery store [00:21:00] and what we do for people and how we set up the banking strategy involves many different aspects. So I’m sure I’ve left a few things out that you probably wanted to dementia, so why don’t you give us a little input or, you know, on something that I might not have made clear.
Seth Hicks: Sure. No, I mean, I think it’s a fascinating example and illustration that that Nelson created and one that that really emphasizes that as you begin to implement and operate your banking, uh, transactions and structures, whether it’s purchasing credit card debt, or. Purchasing an automobile financing, outstanding financing, or actually purchasing it for the first time through your own bank or purchasing a house or investing in something else that you’ve got that cyclical.
Repayment and the money coming back to you, not going to a third party. It’s the same concept as actually paying for the PEs. Instead of walking [00:22:00] out the back door, you don’t let that money come out of your bank and then you don’t pay yourself back, and that you implement the structures, you implement the loan transactions, you execute the promissory notes between the borrowing entity, whether it’s you personally or.
An LLC or a trust that you have, and it actually pays back your own private bank, just like it would pay Wells Fargo back or Bank of AmArica with interest. And thereby you’re getting multiple touches on the same dollar and it’s all growing compounding year after year in a tax advantage way where there’s no there’s no tax liability.
There’s no tax event in that cycle. So it, it’s brilliant, you know, and a lot of times people they begin to analyze, well, if I, you know, I put a hundred thousand dollars into my bank. Do I have a hundred thousand dollars in cash, uh, value available to loan out right away? Well, of course not. And the reason being is because if you.
Die the next day, the life [00:23:00] insurance company’s gonna pay a multiplied uh, x factor on what your premium was. And so you’re buying insurance just like when you fund a new business or capitalize a new business. And you’ve got the location that you have to undertake the cost of that, whether you build it or lease it, you’ve got.
Employees, you’ve got overhead, you’ve got all of the aspects of running a business where the private banking is actually much more efficient, uh, by leaps and bounds, but you still have some. Cost of forming and funding that business. But the, the, the catch up or the point where you begin to go parabolic and the return on your investment is much, much faster.
You’re gonna be making money much faster and ultimately set up a system that benefits you and, and your children and your grandchildren if they choose to, to utilize it in a fashion that just having a business could never.
Aric Johnson: I wanna jump in here, guys. It is kind of almost a, [00:24:00] an outside perspective because Vance, Seth Vance, you, you kind of alluded to this story in one of the very first podcasts as we, we did together, and I didn’t quite understand it then, quite honestly how the comparison was to the private banking strategy.
But what I’ve learned over the time with you guys is, If somebody owns a grocery store, and I’m also gonna, I’m also gonna bring up a car dealership. Somebody owns a car dealership. There’s a certain amount of pride that somebody has in owning that and shopping at their own store. If I’m a Chevy dealer, I’m gonna be driving Chevys.
If I, if I’m, if I own a Chevy dealership, I will be driving Chevys from that point on for sure. Right. Because I have pride in the ownership that I own that car dealership. I’m gonna be driving the cars that I sell to the public. And same thing with a grocery store. If I’m gonna be shopping at a grocery store, it’s gonna be my grocery store.
And when you have that sense of pride, Your family begins to feel that and your, so your children and your grandchildren, if they see what you’ve built with having this, this grocery store [00:25:00] or car dealership, they’re, I, I believe truly they’re more likely to shop from there because, hey, this is my family’s grocery store.
So equate, you know, let’s transfer that to this private banking strategy. There is gonna be a pride in accomplishment to be able to say, Hey, this is our family’s bank. I’m, I’m going to go here for a loan. If I need a loan, I’m gonna go here. I’m gonna, I’m gonna invest my money in this, in this scenario because this is what my family has built.
And that’s the parallel that I drew from this story. , you know, after I learned more about your private banking strategy after I heard about the grocery store, because why wouldn’t your family have pride in something that you took time, effort, sweat, equity to build and built? Well, Absolut Absolutely.
Vance Lowe: Absolutely. I want to hit on something Seth said just earlier. I think it’ll bring put on one more light, Seth perfectly outlined. How the banking relates to the [00:26:00] inventory of a store. Hmm. When you sell something, you have to replace it. It comes back, it put is put back on the shelf. Okay. And then the inventory revolves.
It’s the same thing with money. We have to get the money back, in essence, and it’s our bank when we lend the money out. Those payments come back in and that those payments are accumulated and put back to work. It’s that simple.
So, Any more comments? Uh, Seth, cuz we interrupted you.
Seth Hicks: No, I think it’s, it’s a great dialogue to have.
And just to parlay off of what you were saying, Aric, is that once you can actually educate, uh, you know, first usually one spouse comes to us and they’re excited about it and the other spouse has to have the light turn on. Same thing, uh, pretty much with every married couple. And then as they begin to build [00:27:00] that and they can place policies on their children without their children really understanding the banking.
But as those children grow up and become adults, they’re gonna have to understand how this banking system works. Why? Their private family bank is superior to outside centralized banks and why it’s in their best interest and their children’s interests and their children’s children’s interest to actually take that to heart and begin to implement that.
And the most successful families and folks that we have implementing private banking strategies are the ones that have full participation. And everybody gets it and they begin to, parlay this into r really deep wealth. And Vance tells a story of a person that he worked with that had twin daughters, and they ultimately became you know, like, Had a banking system worked over a hundred million and that’s all they did was make loans.
And as those death benefits rolled over into children and [00:28:00] grandchildren, it began to just accumulate like a avalanche effectively. Mm-hmm. . So, yeah.
Vance Lowe: Anyway, that’s our story for today. On. The grocery store story. A lot of people will read this story and they can’t relate, but it’s our job. What we do is to try to make Nelson’s book come alive.
We also have a book we’ll have, uh, Seth tell us about that. But Aric, you were spot on with the pride, the understanding, and the accomplishment of owning something yourself and seeing the, um, and the ability not to pay taxes. It’s, it starts small, but, you know, if we can double things enough, uh, we show an example in our book, uh, on our website of doubling a penny for 30 days, what it actually will build.
Mm-hmm. , and this banking system will do that, but it is not short-term, it is long-term [00:29:00] strategy, something we do all of our lives. Every day. We want to always plan to have the money come back into our control. Well, a again, this is, you’ve said this before and it’s, it is a lifestyle choice.
Aric Johnson: Um, so Seth, tell people where they can get more information to, to understand this better.
Seth Hicks: Sure you can find, uh, lots of information about private banking strategies at www.privatebankingstrategies.com. So private banking strategies.com. We have a free ebook that you can either read or listen to called, uh, how to Grow Rich With the Secrets Banks. Don’t Want You to Know, we like to call it our Red Pill book because for a lot.
People that are not familiar with private banking they come to find diff different issues and topics like compounding . Interests and tax-free growth within this system versus the way centralized banks work and how the Federal Reserve works. And some of these. [00:30:00] Comparisons between the two that really are like earthquakes.
That Red Pill book is really the first step in learning more about what it is. And of course, we have a whole plethora of podcasts available to folks on our website or in lots of other media in their. Chosen forum that they can listen to content that we’ve created to help educate them and so they can understand what it is.
If you’ve read the book and you’ve listened to a few podcasts and that resonates with you, then they can schedule a call with Vance, an exploratory call where, uh, you effectively start to take things on a test drive and see how your particular financial situation and numbers can benefit in an eight year roadmap that Vance lays out for you.
So that’s our process.
Aric Johnson: Fantastic Vance. Thank you so much for the story. Uh, it resonated well today. I’m sure the, the audience has questions, but they know where to go get answers. Thanks to you, Seth. So guys, any closing thoughts before I wrap this up? ,
Vance Lowe: I think, I’m just so happy to be able [00:31:00] to maybe share some, some insight on this topic that is so widely needed.
Mm-hmm. For Americans today.
Aric Johnson: Yeah. Agreed. Guys, again, thank you so much and of course our last Thank you, ghost to listening. Audience, thank you so much 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 button below this way.
When Vance and Seth come out with a new podcast, it’ll show up directly on your listening device. I wanna pause here for just a second because I want to ask you as the audience, if you have questions, please email them in. Go to the website, figure out how to send questions into these guys. They’ll gladly ask them.
And that’s part of what this podcast is doing is education. So we’d like to hear questions from you, and we also ask. That you share this podcast ready and leave a review as this actually helps others find the . Show. 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.[00:32:00]
Voiceover: Did that story feel like it was about you? Do you feel you should be making more progress toward your financial goals? If 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 and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of private banking strategies.
The content has been made available for informational and educational purposes only. The content is not intended to be a. For professional investing advice, [00:33:00] oh, always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.
