[00:00:00] Intro: Welcome to Private Banking Strategies Podcast with Vance Low 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 fortress for their families.
[00:00:21] Intro: 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 onto the show.
[00:00:37] Eric (Host): Hello and welcome to Private Banking Strategies with Vance Low and Seth Hicks, Vance.
[00:00:42] Eric (Host): And Seth, how are you today?
[00:00:44] Vance Lowe: Doing great. We’re absolutely wonderful.
[00:00:45] Eric (Host): I’m not, I’m not doing great. Uhoh. So here’s the thing is I’ve been thinking about something that you guys said on the last podcast. You guys quoted congressman or somebody, a representative from Texas, and it’s been kind of eating at me.
[00:00:59] Eric (Host): I’m just gonna kind of [00:01:00] paraphrase it. They said IRAs or Roth IRAs or those types of plans are not wealth succession management tools. Here’s the thing that’s bothering me about that. If it’s my Roth IRA, or if it’s my IRA, can I do with it what I please? How can somebody else tell me that isn’t wealth succession management tool?
[00:01:18] Eric (Host): I want to pass stuff to my children. We’ve talked about my grandchildren on this before. We’ve all talked about our kids and family. If I wanna do something with my IRA, who is this person to tell me that that’s not what it’s for? And I know that you guys have kind of talked about why it’s not mine necessarily, and that’s what that last show was about.
[00:01:35] Eric (Host): But that’s been bothering me ever since
[00:01:36] Seth Hicks Esq.: you said that. Well, it’s a great point, Eric, and I think that’s the whole point that I wanted to make in bringing up that congressman’s quote is that it should slap people in the face, and especially if you’ve got a 401k or an IRA or qualified plan. Mm-hmm. It’s an amazing tell at the poker table.
[00:01:55] Seth Hicks Esq.: He’s telling you exactly what we were trying to communicate in the [00:02:00] last episode. Congress is coming after your retirement money and they’re trying to do it, like you mentioned, like a snake eating something from the back legs forward so that you don’t really know what’s going on. Mm-hmm. And we’re trying to ring a bell that causes people to stop and think.
[00:02:15] Seth Hicks Esq.: It should shock you, and the fact is it’s not your money, as Vance pointed out, it’s in a government retirement account of which you participate. Mm-hmm. And they can change the rules and change the taxation such that you have less and less control. Less and less use and your heirs get less and less or perhaps nothing in the future.
[00:02:39] Seth Hicks Esq.: It wouldn’t surprise me if that’s where they take it. Vance.
[00:02:42] Vance Lowe: Okay, guys, I want to change the mood here. Please, by all means, we’re gonna talk about the light at the end of the tunnel. Seth has mentioned many times is that folks, the good news is you don’t have to play in that sandbox. You have your own sandbox, and so I want to go [00:03:00] back in history and I want us to understand what made America so strong so fast.
[00:03:07] Vance Lowe: In a hundred years, America literally went from nothing to the most powerful nation on this planet. And how did they do that? A mentor of mine, Nelson Nash, told me and warned us all so much about how important history is to us. And not to let our government change our history to suit their satisfactions and needs.
[00:03:30] Vance Lowe: We literally went to war over a 2 cent or 3 cent tax increase on tea. Remember the Boston Tea Party? Mm-hmm. Mm-hmm. Triggered the first fight, a very powerful, powerful nation. England got their butts kicked by the Americans ’cause they were very passionate. Americans were known for their independency. They were completely independent.
[00:03:53] Vance Lowe: They were a melting pot, welcomed many other people throughout the world to migrate there ’cause it was a blessed [00:04:00] land. And I believe that more prosperous land than any place on the planet. And they became independent. But picture this folks, these families with kids and everything else would go out into the wilderness, hundreds of miles from civilization, and they would live and they would survive.
[00:04:16] Vance Lowe: Well, they needed banking back then. Okay. And banking wasn’t like we know it today. Back then, the life insurance companies provided the banking equation in the first hundred years of our existence. And people would put their money with the insurance companies and they would do their own self financing so that they could put the money back.
[00:04:37] Vance Lowe: The interest that they charged themselves would be credited to them as well. So they had an ever spiraling increase of money. And this is how the average person did that along with education in their schools, they taught themselves, their families. And when little towns started coming up and there was little community schools, they taught [00:05:00] how.
[00:05:00] Vance Lowe: Money works. They taught how to stretch a dollar, how to get several uses out of a dollar, and became fiercely independent. They taught in schools so that their children would be armed with the same information they had and they could pass on a legacy. Or this independent way of life onto their children.
[00:05:21] Vance Lowe: They could be successful as well. Not only survive in the wilderness, but accomplish the things they wanted to do. Because there was no government control, there was no outside interference. They wanted to have that independence. That’s why they went out in the wilderness. That’s why they created all the land that they did or bought the land so that they could have their own world, their own life.
[00:05:46] Vance Lowe: Let’s talk about how we do that, how we set that up. Seth, we got kind of an outline here, so let’s get into it.
[00:05:53] Seth Hicks Esq.: Sure. Well, we’re focusing on the seventh pillar of private banking strategies, legacy value, and creating [00:06:00] generational wealth that transfers tax free to your heirs. And just like Vance was illustrating in a pioneering frontier of American society, that was one of the fundamental motivations for creating generational wealth, was keeping it in the family and maintaining what you had.
[00:06:16] Seth Hicks Esq.: The wealth stored up in a family banking system, in a private banking strategy, and the death benefits paid on the life insurance policies inside that family bank. They’re transferred tax free to the heirs. Unlike a qualified government plan, there’s no government intrusion and there’s a completely financially private transaction.
[00:06:36] Seth Hicks Esq.: Now I’m gonna tell you a couple stories about how not to do it. Okay. Okay. Everybody should know the artist, formerly known as Prince. Mm-hmm. And his estate was worth just over $200 million and he had no private banking strategy. He really didn’t even have a proper plan for any type of generational wealth transfer.
[00:06:58] Seth Hicks Esq.: Mm-hmm. He lost over a hundred [00:07:00] million dollars in the transfer to his heirs. So of a $200 million estate, more than half. Was lost in taxation to the federal government and to the state of Minnesota. Think of that. If you’ve worked your entire life and whatever you’ve amassed, having it cut in half for your children and those whom you love, IRAs are not succession tools.
[00:07:22] Seth Hicks Esq.: Mm-hmm. That’s what people think they are, and that’s why it shocks the conscious. There’s another person named Susie Orman. She’s really more of a marketing person than a financial genius, although she’s given credit for that. Well, she’s reported in a New York Times article where an interviewer is asking her questions about wealth succession and wealth transfer, and she’s fearful of what she anticipates.
[00:07:48] Seth Hicks Esq.: A $60 million estate. Being cut in half for her heirs and she doesn’t know what to do. She’s puzzled because she doesn’t want 30 million or $40 million of the wealth that [00:08:00] she’s accumulated, falling into government hands that are notorious for pork belly spending and it going to waste. She wants it to be kept in her family and rightfully so, just like pioneering Americans, just like you do Eric, and just like I do, just like Vance does.
[00:08:14] Seth Hicks Esq.: Well, the solution is quite simple actually. Creating a private banking strategy and a system whereby you don’t have to play in their sandbox, you can create a multi-generational wealth succession plan without any government intrusion, tax free. That’s under your complete control and financially private.
[00:08:34] Seth Hicks Esq.: That is what we’re focusing on today. Legacy value for multi-generational wealth.
[00:08:40] Eric (Host): I wanna say one thing real quick because a lot of what you guys talk about is trying to take the control out of the government’s hands and put it back into your hands. And that rings so true for everybody listening to this podcast.
[00:08:50] Eric (Host): But you talked about Prince. One thing that a lot of people don’t know is that he had a vault. With a lot of his music in it that he’s never released. He was constantly [00:09:00] creating music. The man was a genius when it came to music, quite honestly. He had his entire house wired with microphones and was constantly recording something all the time.
[00:09:08] Eric (Host): So he has this vault and the government is now going to try. This is what kicks me. They’re the ones trying to figure out what the value of that is so they can tax that it’s unreleased music. But now they even still wanna dip into that. So when you say that he lost over a hundred million dollars, or his errors lost over a hundred million dollars, it’s even beyond that because they haven’t been able to come up with a value of what that kind of thing is worth.
[00:09:30] Eric (Host): That’s the kind of control that the government really wants. They want to be able to say how much something is worth. So they can tax it to their heart’s delight and content. They get their dollar. They may not have the right numbers, but the numbers that they come up with are in their favor, in my opinion, and not ours.
[00:09:47] Eric (Host): I don’t want that to happen to my kids. I don’t want that to happen to my grandkids. So I love that we’re talking about this today. I don’t mean to interrupt, but that’s the kind of control that the government thinks that they have. I’d like to take that away now.
[00:09:57] Seth Hicks Esq.: Well said. It illustrates the point of [00:10:00] the government being on the grab and on the offensive, and it’s not a government of the people, by the people.
[00:10:06] Seth Hicks Esq.: For the people we’re on two opposite sides of the ball and they’re attempting to take Vance. I’ll let you jump in.
[00:10:13] Vance Lowe: Yeah, so the answer to that question right there. For our listeners is it needs to be well constructed life insurance contracts who have identified beneficiaries and ownership of those policies in such a way that there’s no excuse, there’s no interpretation, and there’s absolutely no government control.
[00:10:36] Vance Lowe: By the way, people probably should understand that a life insurance contract is a will. In and of itself, and it completely bypasses probate in every state. As far as I know today, that beneficiary will go to that person or that entity outside probate every single time because that’s how all states and our government [00:11:00] treat life insurance in general.
[00:11:01] Vance Lowe: That’s important to understand is for legacy, you’ve gotta be able to depend on something. And here’s one more great light. I would say whenever there’s a changes in government, if government wants to come after something, they certainly can, but the rule of thumb is it’s always grandfathered with life insurance contracts and entities because deals have already been struck and assets have been committed in certain areas that they can’t disrupt them.
[00:11:28] Vance Lowe: Normally life insurance changes from time to time. Costs can go up, costs can go down, different qualifications can change, but it doesn’t affect anything prior to the date they set for the changes.
[00:11:42] Midroll: Did that story feel like it was about you? Do you feel like you are generating a lot of revenue but are not moving forward as fast as you would like?
[00:11:52] Midroll: Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get [00:12:00] unstuck. Are you ready to take action and get your own private bank? Please visit us at www.privatebankingstrategies.com. Okay.
[00:12:13] Eric (Host): Walk me through a couple examples of how this could work, whether it’s client examples or just examples of what this strategy can do, especially where it comes to this pillar.
[00:12:21] Vance Lowe: I think Seth has prepared an outline here of a family. Let’s just take it right from the top. This father is putting money into a contract, so let’s walk that through Seth, and I think this should be able to answer Eric’s questions for the people as well.
[00:12:35] Seth Hicks Esq.: Sure. We’ll give it a high level and then we’ll put some numbers to it to give it more context.
[00:12:40] Seth Hicks Esq.: Mm-hmm. Let’s say a father and a mother develop a private banking strategy, Eric, whereby they have insurance policies, whole life insurance policies on each of their lives, and that is the foundation. For the family banking wealth succession plan. Now on these policies, there’s a high cash value whereby the [00:13:00] father and mother can use the cash value in those policies for investment, real estate acquisition, for vacation, for retirement, for anything that they want to and need to, and it’s there basically with a simple push of a button and you can have it wired in.
[00:13:18] Seth Hicks Esq.: It’s that simple. It’s very accessible. They control it.
[00:13:22] Vance Lowe: Yeah. See in a life insurance policy, it escapes the Dodd-Frank Act because the life insurance companies themselves are grandfathered ’cause they were in existence before the IRS. Okay. It’s important to know that the cash reserves and life insurance policy with life insurance companies is the safest place on the planet to store money until you wanna put it to work or you want to use it.
[00:13:45] Seth Hicks Esq.: So the father and the mother have access to the cash value that they can use it. That is the corpus of their family bank. That’s the start of the family bank. Now they’re hopefully teaching their children how to bank, what the family bank is, where they [00:14:00] have money stored, where they borrow money from so that they can understand and operate in the family bank.
[00:14:06] Seth Hicks Esq.: When the time comes, I like to call it the black belt succession. So they’re teaching their kids, and I have my kids learning about private banking and learning how money is stored in our family bank and when they want something that they think they need, how that transaction looks, dad doesn’t just give them money.
[00:14:24] Seth Hicks Esq.: They have to borrow it from their own bank, and they’ve already accumulated their own money that they’ve earned in various capacities. They’ve got a chicken egg business, they’ve got a jewelry business, they’ve got a golf ball reclamation business, and all of those things provide streams of cash flow into their bank.
[00:14:42] Seth Hicks Esq.: And they see a bright new shiny bike that they want to get, and they have to borrow that money from the bank, and they have to create a promissory note and promise to pay it back. So the next golf ball that they sell, the proceeds are gonna be used to pay back the note into their own bank. So they’re [00:15:00] always getting the money back.
[00:15:01] Seth Hicks Esq.: And they’re charging themselves interest, which is tax free and grows and compounds year after year without any government intrusion. Now, when the children have a black belt, and let’s say they’re 25, 30, 35 in private banking, and they can actually have the ability and the wisdom to take over as a trusted steward for literally hundreds of thousands, if not perhaps millions, depending on how much the contributions are, then they take over the cash value of a policy that’s on their life.
[00:15:31] Seth Hicks Esq.: Okay. Father and mother have taken out policies on their own lives and they’ve taken out policies on their children’s lives. And when the children are of appropriate age, the children then become the stewards of each of their own policy or policies, depending on how many contracts they have in place, and they begin to use and operate in their.
[00:15:51] Seth Hicks Esq.: Family bank, their own cash value, their own investment, their own needs, and they learn how to use that structure. And here’s why, is because there’s [00:16:00] gonna be a death benefit that’s paid when the father or the mother come into passing, whereby that death benefit is paid to the beneficiaries and the heirs.
[00:16:09] Seth Hicks Esq.: That’s the children, and it’s not gonna be taxed. It’s not gonna be disclosed, and a lot of times it’s multiple millions of dollars. So these children need to have been schooled as they’re learning this to take that black belt, so to speak, and private banking and that money that’s dumped into their private bank and is disposable for their use and redeployment into their own family banking succession.
[00:16:32] Vance Lowe: Also what it does say, it funds the next round of policies. Eventually on the kids’ kids, it goes into the accounts and it purchases additional policies downline on the family. So this is why it’s multi-generational. The funds are already there to perpetuate, and there’s not even a skip a heartbeat. It actually is funded higher and higher and higher.
[00:16:56] Vance Lowe: This is a perpetual increasing money pile. Oh, [00:17:00] I’m sorry to interrupt. I just wanted to share that for those death benefits that come in tax free, it’s not even reported to the government, by the way. These are private things and now those checks come in. The government monitors money that’s going in, checking accounts.
[00:17:13] Vance Lowe: They’ll see that a death benefit was paid into an account, but they don’t get it.
[00:17:18] Eric (Host): Alright, I’m gonna jump in real quick, guys. Give us some kind of the hard numbers of how this works in this generational planning.
[00:17:24] Vance Lowe: Alright, so I’m gonna do a specific scenario. I’m really gonna talk about what I did for me, my kids, and my grandkids.
[00:17:32] Vance Lowe: So the rule of succession is as adults, we get to a point where we start having hopefully excess money and we put them into a life insurance contract. So in this case, we’re putting $15,000 into our children’s policies. Because we can qualify to do that. The qualifications is a different topic, but just assume we can qualify to put that much in at their ages.
[00:17:58] Vance Lowe: We start that process [00:18:00] and we start funding that. Now, in my case, I had 10 grandkids, so I started policies on all my grandkids also anywhere from $2,500 up to the $15,000, depending on their ages when I had just like everybody else qualified assets. From 4 0 1 Ks, IRAs, and Ross, you want to move money out either systematically or you tear the whole thing out.
[00:18:26] Vance Lowe: You pay the taxes and you immediately buy as many of these contracts on kids and grandkids as you possibly can. But once we put in $15,000, let’s just take a single one now into one child’s account. You are the owner and you are the beneficiary. Not that child. That child has no control over that account.
[00:18:46] Vance Lowe: Same way with the grandkids. The parents are not owners of those policies. I am. And for me, the ownership will go into a trust. The trust will be the owner of all of these contracts. This is how we [00:19:00] make it perpetual. The trust receives the death benefit. The trust then applies for additional insurance on the younger generations to whatever extent they can.
[00:19:10] Vance Lowe: But this $15,000 premium gets paid every year for an amount of time, and we start teaching that child. Here is an account. We’re gonna do college, we’re gonna do your first cars, we’re gonna do this, we’re gonna do that. However, this child needs to be taught because you’re going to carry on the banking legacy instead of an inheritance.
[00:19:32] Vance Lowe: In my situation, I told ’em they were disinherited and that got their attention. So here’s how you access money. By using the account, you earn equity into the bank. Would you like your earnings to be high or low? Because I tried it another way and everybody asked, well, what interest rate are you gonna charge?
[00:19:50] Vance Lowe: And I tell them what we’ve gotta have, and they go, oh no, I can get it here. Well, that’s a game you have to play. If you put it into earnings, how much equity earnings would you like in the bank? [00:20:00] Then they’re gonna say high. I say, well, that’s the interest that we charge. Then. That’s your equity in the bank.
[00:20:05] Vance Lowe: The more one person uses, the more equity he can have over another. When profits can be taken out of the family bank, so this individual learns that, learns that he has to pay it back or she has to pay it back with interest, and then the lights come on, all my money’s back, all the money I’ve paid for this car now is back in the account.
[00:20:23] Vance Lowe: Plus the interest in the life insurance contract. Folks, we’ve talked about this before, you get uninterrupted interest. That’s how we do this. This is how we move money from qualified accounts, and then it’s just math, Eric. Yeah. This is how long it takes you to make the tax money back that they took from you.
[00:20:41] Vance Lowe: This is the penalty money that you get back, the ways we set this up for our clients so that they can actually see where they’re at, where they’re going, and what they want to do next.
[00:20:50] Eric (Host): Alright, well, like you said, we’re short on time. That was a great way to end this podcast. I think that gives a lot of people food for thought.
[00:20:57] Eric (Host): And I’m gonna ask you one more time for some contact [00:21:00] information because if they heard that last, just that last little bit, Vince, that you just shared there, I think that was a huge attention grabber, right? Because that gave another sneak peek into what it could look like. And like you’ve said before, and Seth, you’ve said before, it’s individualized.
[00:21:13] Eric (Host): Everybody’s situation is different.
[00:21:15] Vance Lowe: Eric, I call that the goosebump factor.
[00:21:17] Eric (Host): There you go.
[00:21:18] Vance Lowe: The reason that gets me. Back on the table to help people is because when the lights come on, it gives me goosebumps. They win and we all win. Yeah. This is why it’s so critical.
[00:21:29] Eric (Host): Yep. Absolutely. Alright, so where should people go to get some resources?
[00:21:33] Seth Hicks Esq.: The best place to start is at our website and that’s private banking strategies.com and put in your contact information. In return for your contact information, you’re gonna get a book, which we like to call a red pill book, and it’s going to highlight issues like we’re describing on this podcast on the prior podcast that will enlighten the audience’s mind to see how banks are not your friend and how there are alternatives that [00:22:00] you can benefit from greatly.
[00:22:01] Seth Hicks Esq.: The Red Pill book. Is the first step to read that. You can get it in the audio version if you’re on the go, or you can read it either way. And also when you put in your contact information, you’re gonna start to get emails that are educational in nature that are gonna also spot red pill issues that are gonna drill down on some of these topics.
[00:22:19] Seth Hicks Esq.: I had a client just say to me, two weeks ago, I heard some of your content on a podcast regarding 401k and retirement strategy. But until I got a few emails on it, it didn’t. Click for me. Mm-hmm. The light bulb came on. So sometimes Eric people will hear a podcast. They may hear this podcast and it may generate five more questions in addition to what they wanna know.
[00:22:41] Seth Hicks Esq.: And so those emails are really helpful at explaining things again and helping people get another touch with us and getting more on the content. So those emails. And the book. And if you’ve gone through those things and these principles, these concepts are resonating, that Vance and I and things we’re discussing are [00:23:00] resonating with you, then you can discover further how it would apply to you and your personal situation by getting on an exploratory call with Vance and going through that process.
[00:23:09] Seth Hicks Esq.: And that all starts on the website by putting in your contact information and going through that process I just described.
[00:23:16] Eric (Host): Absolutely. Alright, wait just a second. Audience. I’m actually interrupting myself, which is really weird. But after we got done recording this podcast, Vance, Seth and I were talking about it and we’re talking about how they can help the audience visualize what they’re talking about and they are creating a loom video that will be linked.
[00:23:31] Eric (Host): In the show notes to this podcast, so look at the show notes. There’s a link there that will take you directly to a Loom video so you can actually see the numbers and look at the example that Vance was talking about, an example so that they can walk through the numbers and show you how it works. I mean, that’s the important part.
[00:23:46] Eric (Host): They want you to know how it works. We wanted to insert this little bit of audio into the podcast before I close out the show to let you know that there is that loom video. Don’t miss it. Vance and Seth, as we wrap this up, I just wanna thank you again for providing that content and also your [00:24:00] contact information for the listening audience.
[00:24:01] Eric (Host): ’cause I agree a hundred percent for every one story you told, I’m sure five questions came up, they can go and get more answers. Thank you for your time today and of course our last thank you is always for you, the listening audience. Thank you so much for tuning in and listening to the Private Banking Strategies podcast with Vance Low and Seth Hicks.
[00:24:16] Outro: 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 visit us at www.privatebankingstrategies.com. Thank you for listening to the Private Banking Strategies Podcast.
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