[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 tax-free 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.
[00:00:41] Eric (Host): Today Vance is gonna be telling us a story of how one gentleman actually used the private banking strategy to finance equipment. So I’m, I’m really, really interested to hear this Vance. What’s this story all about? Well, it’s an
[00:00:52] Vance Lowe: opportunity to do and put into action things that we do on an everyday life and turn them [00:01:00] to our benefit instead of someone else’s.
[00:01:02] Vance Lowe: Mainly the banks. Mm-hmm. The banks always get the money back, so we have a lot of wealth, a lot of money flow through our hands on a day-to-day basis. But the problem is it just keeps going. It comes into our control. We get to spend it one time and then it goes out. And so I’d like to relate, actually, a true story.
[00:01:20] Vance Lowe: This story is about a nephew of Nelson Nash’s and the charts and everything that we’re gonna make available again for this podcast. We will give you that, uh, information in the notes, but it’s in Nelson Nash’s book, becoming Your Own Banker. This nephew, his name is Paul. I’m saying it’s Paul, and I’m also going to use his last name as Bunion.
[00:01:43] Vance Lowe: These guys are lumberjacks. This young man, when he was 30 years old, he lost his dad to a logging accident. And inherited a small logging company and, and a 30-year-old, they’ve kind of arrived at what, what they’re doing and he really understood his dad’s [00:02:00] business, looked at the numbers and immediately saw, this is gonna be a great business for me, so I need to set up a retirement plan.
[00:02:07] Vance Lowe: So he called his uncle, Nelson Nash came in and said, what are you looking for? And he said, I need to set up a retirement program. He said, okay, let me go do some numbers for you. He said, how much do you wanna put in? He says, I can put into my retirement program $40,000 a year. This is where I thought I had Nelson in his book.
[00:02:26] Vance Lowe: ’cause my job is dissecting and doing the numbers and making sure from reality versus theory. So I thought this was a theory test that Nelson had. Called him on it and talked to him. He said, Vance, what’s in this book are personal things that actually happened in my extended family. That’s why I found out that this was a nephew and a 30-year-old.
[00:02:50] Vance Lowe: I thought, ’cause it had never happened to me. What 30 year old’s gonna invest or put $40,000 into a life insurance premium? Well, they could do [00:03:00] so much more. Anyway, he came back with an illustration, and I know the, uh, audience can’t see this, but I don’t think it’s necessary for right now. It had this young man putting in $40,000 a year for the first four years from 30 through age 33, so that’s four payments, $160,000.
[00:03:21] Vance Lowe: And he said, if you want, you can quit after that. And he goes, I can quit. He says, yeah, because by the time you’re age 65, there will be over $1.5 million in cash value. Guaranteed by the insurance company and you can withdraw. I just worked the numbers out for you. $92,000 a year income tax free every year for the rest of your life.
[00:03:45] Vance Lowe: Eric, does that sound like a pretty good retirement program to you? Yeah, I’m digging it. I like that. Again, the internal rate of return was over 5%, five and a half percent, and these were life insurance contracts. Now, granted. [00:04:00] Contracts way back then were a little bit different than they are today. Mm-hmm.
[00:04:04] Vance Lowe: And tomorrow’s contracts will be a little bit different than than ours today, but this is how it works. This is your program. And he immediately set it up and went into it and said that that’s pretty good. And maybe after four years we’ll work on something else. And as an afterthought. Nelson turned back to him and he actually acted it out for me.
[00:04:23] Vance Lowe: By the way. He just kind of turned around and said, oh, by the way, you’ve got all this equipment out here. You’re leasing that, right? He says, yeah, I have to pay $16,000 a month. Wow. He says, well, next time one of those pieces of equipment come up in a couple years from now, call me because I think I can show you how to self lease some of that equipment.
[00:04:44] Vance Lowe: And sure enough, in year four, he, he just made the payment. He’s got four logging trucks, and he asked. Nelson, he says, you told me to call you the next time one of my pieces of equipment came up for lease my logging [00:05:00] trucks. You had four of ’em over a four year period of time, and that puts 400,000 miles on my trucks and I trade ’em in for another one.
[00:05:07] Vance Lowe: Can I do something? And he says, well, I don’t know. Go get the leasing paperwork on the new one. And he actually shows that leasing paperwork in his book. But I want to tell you a little bit more background on this business. This company, this young man had a small logging company, had four logging trucks, and out in Washington, Oregon area.
[00:05:32] Vance Lowe: They call these D eight cats. You know, bulldozers? Mm-hmm. Tractors, they call ’em tractors. These things sweep in and make a road almost in one pass. And he’s got two of those, and he is got one tree shear. So when that timber falls down, this tree shear picks it up, run it through a bunch of blades, and it becomes an instant log.
[00:05:53] Vance Lowe: It just trims all the branches off in five seconds. What we don’t understand is that a tractor or a bulldozer [00:06:00] costs twice as much as a truck and a tree share costs twice as much as a tractor. And so he’s got $16,000 a month being paid to the leasing company. And I don’t know if any of you out there in the listening audience have ever leased anything.
[00:06:16] Vance Lowe: What do you get back once you make that lease payment?
[00:06:20] Eric (Host): Nothing.
[00:06:21] Vance Lowe: Really. Nothing.
[00:06:21] Eric (Host): Yeah. I, I lease, my wife and I leased a minivan. Okay. Worst mistake of our lives. Oh my Lord. Uhhuh, it was just, it was 600 and I think $640 a month to lease that minivan because I had three TVs, guys. I mean, this was, this is state of the art, and I’m thinking, wait a second, I’m driving.
[00:06:35] Eric (Host): I don’t get to watch any of these TVs in this thing. But it was, it was a bad decision. Yeah. Three years of. Regret.
[00:06:42] Vance Lowe: Okay. That was the situation. So he went and got the paperwork on the new lease, and I’ve got the actual paperwork in his book. It’s a 1984 Peterbilt new back then was 65,790 bucks. They were gonna give him [00:07:00] 13,000 and some change in a trade-in, so he is gonna finance $62,600 over a 48 month period of time.
[00:07:09] Vance Lowe: Hmm. So they looked down here on the lease, and that’s gonna be approximately $1,502. So we’re just gonna say $1,500. A month in the lease payment. So he brings that back to Nelson. Nelson comes back with a illustration showing him how he can finance that. At that time, he had $157,000 in cash value after he made that fourth year payment.
[00:07:36] Vance Lowe: So he had more than enough to do the lease. So he reached in and he borrowed that money and set up the lease company, the leasing with himself as the money person. And his company still leased it, but the payment went to him. So as we looked down over. The life of an individual, and again, this is something maybe we’ll we’ll [00:08:00] point out a little bit later on, but every four years this illustration showed him releasing another vehicle.
[00:08:07] Vance Lowe: Mm-hmm. And paying himself back. $18,000 a year. ’cause 15 times 12 is 18. Right? Sounds good to me.
[00:08:17] Eric (Host): Yeah.
[00:08:17] Vance Lowe: But I wanna show you the difference. Instead of 1.5, now there’s just under $2 million in the account and his income goes from 92 up to $125,000. Tax free income, and this young man does his own math and he goes, wow, by self financing, I just increased my net worth or my retirement account by $500,000.
[00:08:48] Vance Lowe: He goes, yep. He said, well, is there any risk here? He says, Nope, this is all contract, but because you leased it, you put all the payments back in. We were able to build that [00:09:00] contract so that he could put the interest back in as well. Okay, and it grew an extra $500,000. Now, he didn’t change anything. That $1,500 a month was going out somewhere.
[00:09:12] Vance Lowe: But it just went into his account instead. So he put a little bit of money to work $52,000. Then over about a 32 year period of time or so, it was an advantage of over a half million dollars. So he’s thinking, well, look, that was only $52,000. Uncle, can I lease two vehicles? And he goes, sure enough he can do it because again, he’s got 157 or $54,000 in his account at that time.
[00:09:40] Vance Lowe: So if that’s the case, every single vehicle he’s able to finance, if it’s at the same time, he’s gonna make another. $500,000 and he shows the illustration that it does. He, he gets very, very successful here and this young man gets extremely excited that, look, I [00:10:00] realize now that look what, what the leasing companies are making on me over a lifetime.
[00:10:05] Vance Lowe: When I release and release and release and release, they make all the money I have to earn that income over again. And it’s not doing me any benefit. But if I’m. The bank, the leasing company, I get the advantage. So yes, there’s now just under $2.5 million and his tax free income goes up to 150,000. So just each truck is worth $25,000.
[00:10:34] Vance Lowe: More in income and about a half a million dollars towards his retirement account. And that’s not to mention the death benefit, the death benefits on the second one put him up to almost $4 million that he passes to, hes income tax free. So that’s the story. There’s a lot more to it here, but there’s a lot I’ve gone over.
[00:10:55] Vance Lowe: Mm-hmm. That we need to go in and dissect.
[00:10:58] Midroll: Did that story feel like it [00:11:00] 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? Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get unstuck.
[00:11:16] Midroll: Are you ready to take action and get your own private bank? Please visit us at www.privatebankingstrategies.com.
[00:11:28] Eric (Host): Seth is gonna go through how the seven pillars really relate to this story and, and what was being done to make this happen. Seth, go for.
[00:11:36] Seth Hicks Esq.: Thanks, Eric. The first part of this story that sticks out to me is the fact that this client, Paul Bunyan, started at age 30, and this is a shout out to all of the young listeners to really pay attention, and that is that there’s great wisdom in starting private banking strategies now.
[00:11:53] Seth Hicks Esq.: This is a 30 5-year-old story, Vance. He mentioned this Peter built equipment. The first one financed was [00:12:00] in 1984, so it’s about a 30 5-year-old story. And at the end of this scenario, which we’re gonna make video available, which breaks down a spreadsheet and these illustrations showing each one of these heavy equipment financing purchases and additions and, and how that played out with his retirement income.
[00:12:20] Seth Hicks Esq.: At the beginning of his retirement, he’s pulling out over half a million dollars, and that’s in today’s value. And the way that I get there is taking a 30 5-year-old value and taking 3% inflation average over the last 30 plus years. Mm-hmm. And you’re getting to a much higher number. So in today’s numbers, Paul Bunion was taken between 500 and $750,000 out a year, and he left.
[00:12:44] Seth Hicks Esq.: Wow. $5 million tax-free death benefit to his heirs. Number seven of the seven pillars of private banking strategies is legacy value. Well, creating a $5 million tax-free gift to your beneficiaries is certainly legacy [00:13:00] value and simply by putting to to work the money that he already made. He didn’t go out and invest in other investments that he hit a home run with.
[00:13:09] Seth Hicks Esq.: He didn’t work harder. He didn’t take second jobs on. He simply did what he was already doing. But instead of giving the money away to regular banks and letting them make the money off of him, he began to cycle that money through his own family bank. The next important part of this story is. Kind of concentrates on pillar number four, and that is the velocity of money getting multiple touches on the same dollar.
[00:13:34] Seth Hicks Esq.: Mm-hmm. And this is one where people routinely get hung up and they go, well, how can I spend a dollar more than once? And the way that you spend a dollar more than once is you first deposit it into your own bank and then you lend it to a borrower, which is yourself or an entity that you structure, and that’s a second touch.
[00:13:52] Seth Hicks Esq.: And then you put that same dollar to work in some form of investment. That spins out cash flow for you and you pay your bank [00:14:00] back. That’s the very simplistic flow chart of getting multiple touches on the same dollar. And there are folks in our client base and others that Nelson has worked with that have had many, many more touches than I thought, ever conceivable on the same dollar in the way that they cycle these structures.
[00:14:17] Seth Hicks Esq.: So it’s really only bound by your own creativity and your own imagination and financial acumen. Those two pillars to me. Or a slam dunk. Now that’s not even touching the fact that it grows tax free. It never went backwards. It’s asset protected and he never has to go to the bank again when his bank is capitalized and seek financing on bank terms.
[00:14:41] Seth Hicks Esq.: Mm-hmm. On their interest rates, on their terms schedules, their amounts, and we all know that banks, they’ll lend you money when you really don’t need it. But it’s when you need it, that things get a little bit tighter, as we all figured out if you were in real estate in the last mortgage crisis, right?
[00:14:57] Seth Hicks Esq.: Mm-hmm. Mm-hmm. This is the perfect investment [00:15:00] and it’s the perfect use of money that someone already has cash flow on. So business owners and entrepreneurs out there who already have cash flow and are already using traditional banks to finance those businesses. Or make those investments they need to strongly consider this and understand how it works.
[00:15:17] Eric (Host): Yeah. And, and I know that I have the notes sitting in front of me and, and I love kinda reading through and seeing the different things. And I know that you touched on it, but pillar number six is actually labeled guaranteed financing. That would be great to not be declined or have somebody say, well, we want all these proof of income and we want all these credit checks and everything else to, to be able to say, you know what, I’ve got it in my personal bank.
[00:15:39] Eric (Host): I’m gonna grow my business, therefore I need to lease some new equipment, whatever the business is, and it’s guaranteed, guaranteed financing because it’s my own bank. I love that.
[00:15:47] Vance Lowe: Yeah, Eric, wouldn’t it be wonderful if you get in the middle of it and all of a sudden the economy changes and all of a sudden things get really tight?
[00:15:55] Vance Lowe: How hard would it be to refinance things at your bank? [00:16:00]
[00:16:00] Eric (Host): Oh, yeah, no, they’re gonna say, we, we’d like our money. Let’s just stick with the plan. No, I mean your, your personal bank. Oh, in my own personal bank? Yeah. No, then, then I guess I’m the decision maker, or, or my, my wife is one of the two.
[00:16:11] Vance Lowe: You could easily do it, right?
[00:16:13] Vance Lowe: Yeah. You don’t have to, you know, you just, you restructure it. You just don’t want to not pay yourself back. It just may take a little more time and, mm-hmm. It’s easy to do because you are getting the interest off of it, so you can take as long as you want. Right?
[00:16:27] Eric (Host): Yeah.
[00:16:28] Vance Lowe: Wow. Alright, great. Is there more to this story?
[00:16:31] Vance Lowe: Oh, there’s so much more.
[00:16:33] Eric (Host): Okay, so I, I know that we don’t have a ton of time on today’s podcast, but what are some of the other things that we’re gonna be talking about on the next one? If we’re gonna continue this story about Paul Bunion, what are we gonna dive into on the next one then?
[00:16:44] Vance Lowe: Well, just like I, I, I want to have other.
[00:16:47] Vance Lowe: Maybe small business owners understand that there’s something here without changing really what you’re doing without having to work harder to be able to put your assets to work in a manner [00:17:00] that will solve multiple issues. And that’s what Seth is saying as well. So I wanna carry out, I wanna show how this young man literally was able to finance his entire.
[00:17:13] Vance Lowe: Inventory of equipment and what that results to. Sesso touched on it, but each step along the way, there’s something more for all of us to take home and to learn so that we can really get in depth in this.
[00:17:25] Seth Hicks Esq.: Eric, here’s what I really like about this, and it kind of cycles back to what I was saying is how this is only limited by your creative imagination and your business acumen.
[00:17:34] Seth Hicks Esq.: He, he came to his uncle looking for a secure retirement. He wanted to have enough for retirement. That’s pretty insightful for a 30-year-old, but he didn’t even realize that he was doing something wrong. Well, what was wrong? He didn’t realize that he was meat for the bank. Mm-hmm. He was just cattle on the field and that the bank was making all the money off of him when he could have been making that same interest income [00:18:00] through his own family banking entity.
[00:18:02] Seth Hicks Esq.: Now, when he caught the concept that Nelson taught him, whereas. This is gonna give you $92,000. That was his first stopping point. $92,000 a year at retirement age. He’s gonna work this plan for about 35 years, and he’s gonna be able to pull out $92,000 a year tax free. No early withdrawal penalty, no late withdrawal penalty.
[00:18:25] Seth Hicks Esq.: Didn’t matter what tax income bracket he was in, didn’t, wasn’t tied to the stock market, wasn’t gonna get wiped out with any type of market disaster or correction. It certainly wasn’t. A hope for the best plan. It was a rock solid guaranteed plan with a company that has never gone bust. And this strategy has been in play for over 200 years.
[00:18:48] Seth Hicks Esq.: So this story highlights how most Americans, they feel like they don’t have enough for retirement. They’re gonna run out of money before they need it, and they’re gonna die. Poor, broke and [00:19:00] disgusted. Mm-hmm. Well, this gave him the. The security and the ability to rest assured know that he was gonna have enough money and 92,000 was just the first stopping point in the illustration that Vance walks through in the video that we’ll make available to our audience.
[00:19:15] Seth Hicks Esq.: The the end game was, like I said, 250, this is the next stopping point. Mm-hmm. 500. Each time he began to add more equipment in his business to the financing schedule, he just exponentially grew. And that’s what we call tailwind. I’ve mentioned that in prior podcast and we’ve. Discuss that some that’s tailwind behind your plane, giving you lift and acceleration and momentum as opposed to headwind, which is what you get when you use other banks.
[00:19:43] Seth Hicks Esq.: Yeah, this story illustrates that perfectly, just like the auto financing one did, except this is auto financing on steroids.
[00:19:50] Eric (Host): Alright guys, well this has been fantastic. I know that we’ve got a lot more to cover for Paul Bunion on the next episode, so I’m looking forward to that. Any other closing thoughts for today’s [00:20:00] podcast?
[00:20:01] Vance Lowe: I just hope that people understand that there is something that you can do without having to work a lot harder. We’ve always been taught, well, if you want to change your outcome, work harder. Mm-hmm. Spend less, cut back. It’s not what you have to do. The game is who ends up with the money. So, yeah. I just can’t wait to show you the rest of it.
[00:20:22] Vance Lowe: Yeah. And, and
[00:20:22] Eric (Host): the banks aren’t gonna tell you, right? I mean, the, the banks aren’t gonna divulge this information and tell you to do it a different way besides them because they want the money. And that’s what none of us have known yet. Right. So that’s why I’m so excited to be a part of this podcast. I appreciate your guys’ time and the information you’re bringing forward.
[00:20:37] Eric (Host): So Vance and Seth, thank you so much. And of course, our last thank you goes to you, the listening audience. Thank you for tuning in and listening to the Private Banking Strategies Podcast with Vance Low and Seth Hicks. If you have not subscribed to the podcast yet, please click the subscribe Now button below.
[00:20:49] Eric (Host): This way when Vance and Seth come out with a new podcast, it’ll show up directly on your listening device. This makes it much easier to share these podcasts with your friends and family. Again, thanks for listening today.
[00:20:58] Outro: Did that story [00:21:00] feel like it was about you? Do you feel you should be making more progress toward your financial goals?
[00:21:06] Outro: 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. Click the subscribe button below to be notified when new episodes become available.
