[00:00:00] Intro: 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 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] Seth Hicks Esq.: Hello and welcome to Private Banking Strategies Podcast, Vance Lowe and Seth Hicks.
[00:00:42] Seth Hicks Esq.: Vance, how are you?
[00:00:44] Vance Lowe: I’m doing great. I couldn’t be better.
[00:00:46] Seth Hicks Esq.: Awesome. Well, we’ve been talking about the hundred Year family bank and what that is, what problems it solves, what benefits and values it has. We talked about various architecture [00:01:00] with that in our most recent. Podcast. And today I think we’d like to jump into exactly how some of the architecture works in the family setup, how the loan engine in the family bank works.
[00:01:13] Seth Hicks Esq.: What is the loan process and how does that fuel your system? What’s a smart risk framework so you don’t over-leverage? And what is the generational blueprint? To carry forth this family bank for a hundred plus years. So those are some deep topics. We could talk about those for hours, but we’re gonna just outline these 30,000 foot overview for folks and obviously folks, as I stated before, if you want to dig in further, hit our website, private banking strategies.com.
[00:01:43] Seth Hicks Esq.: Hit the like button, share this content with folks you think that it would matter to. And we’re on a, a journey to help as many people become financially literate and financially free that we can.
[00:01:56] Vance Lowe: Folks, if you’re just joining us for the first time and jumping in on [00:02:00] this one, if you haven’t listened to our prior podcast on this topic, you’ll want to do that right?
[00:02:06] Vance Lowe: Right. To catch you up. So yes. Okay.
[00:02:09] Seth Hicks Esq.: We build building block Upon Building block, and that’s a good intro to start talking about some of the subjects, and this is a little bit deeper.
[00:02:18] Vance Lowe: It is. And so we’ve already got the structure built. We’ve talked about the architecture. Now we need to flow money, and this is the loan process.
[00:02:27] Vance Lowe: This is the loan engine. If you’ve had a permanent life insurance policy that has cash value, you know you can borrow money and pay it back. So there has to be a structure in this framework. Seth, tell us a little bit about what it would be to structure it in a way that we wouldn’t just lose the money out the back door.
[00:02:47] Seth Hicks Esq.: There is a core engine to the family banking system, and it is the loan engine. You are utilizing the cash that you have created and capitalized [00:03:00] in your family bank system and when you want to access that cash. Our general rules are it should not be for purely consumptive purposes 100% of the time. It can be for consumptive purposes for a minority of the time, but for the bulk of your.
[00:03:19] Seth Hicks Esq.: Access to liquidity. It should be for income producing and return on investment type structures. And so that is the core principle of creating a safe framework that you don’t become over leveraged in your consumptive banking. So I call that the loan engine,
[00:03:37] Vance Lowe: Seth. There are different ways to access money.
[00:03:41] Vance Lowe: Depending on the structure and just like you said, if there’s gonna be a consumption of anything, and yes, that should be kept to an absolute minimum, but if we’re going to do that, we can access money out of this whole structure differently. There’s loans process [00:04:00] and there is surrender processes. Of how to access money.
[00:04:05] Vance Lowe: One, we can get it back in the other one if we decide to take it. There’s no interest on it, but we can’t put it back in. Okay. There’s different kinds and this loan engine is going to be capable of handling all of that need no matter what or after what we’re trying to go for. It will also handle additional new windfalls, let’s say.
[00:04:30] Vance Lowe: The family large enough that it bought into a multi complex for income property and they finished that property out and it peaked where its goal was and they decided to sell it and they made a lot more money. Where can they store that money? The best place to store that would be in some formal structure that has a whole bunch of outstanding depth that can be filled up.
[00:04:57] Vance Lowe: And this is very strategic to [00:05:00] be able to do that in structures like this. So it will handle where an individual wants to go or any other type of money access scenario. We might have an in on crypto and we might say, okay, if I invest in crypto and I’m looking for a 10 x, I need a place to put that. If I’ve got 10 of my own personal policies out there and they’re fully lent out to where I’ve got a couple of hundred thousand dollars worth of debt in there, that would easily hold a lot of the gain.
[00:05:34] Vance Lowe: So that’s about as deep as we want to get into that structure. But just so people understand that it is so fluid and yet so private, no one on the outside needs to know what’s going on. Right.
[00:05:47] Seth Hicks Esq.: It allows you to finance real estate, investment, business acquisition, expansion, education, college tuition, various family investments that benefit the [00:06:00] entire family bank, and that loan engine has to be the primary working me.
[00:06:07] Vance Lowe: We have one couple decided to work out a deal with one of their children because he wanted extensive training. It wasn’t about college, it was about in his profession, he needed to go get a huge certification that cost thousands and thousands of dollars. So, yeah, we’ll lend you the money and when you graduate and you get into your employment, you’re going to pay that loan back, and then that loan back will then be credited to you as your percentage of ownership in the structure.
[00:06:41] Vance Lowe: So yeah, they could come up with anything, cars, you know, anything that family has motivation in this will bend and fit their niche perfectly.
[00:06:51] Seth Hicks Esq.: Right, and so we’re not going to finance things through traditional financing, except in cases where [00:07:00] the leverage is very beneficial for us. For example, if we could use our cash value and our policy to purchase one fourplex quad and it produces $4,000 a month, and at that quad cost us just for simple math, a hundred thousand dollars, we’re getting.
[00:07:19] Seth Hicks Esq.: $4,000 on a hundred thousand dollars a a month? Correct. That’s the cash flow back into your bank. Perhaps a proper use of leverage where you did use third party financing would be to put down payments on, let’s say multiple quads, not just one. And you’ve got a deposit down on those. You use third party financing for the other part, and then with your cash flow, you pay off and settle those.
[00:07:48] Seth Hicks Esq.: Third party loans more quickly. You ultimately have more property, more cash flow, more wealth curve with that type of leverage. But obviously [00:08:00] leverage is something that we counsel and teach people to use very cautiously, and you have to have a smart risk framework, which is the next segment of the outline that I’d like for you to kind of address.
[00:08:13] Seth Hicks Esq.: How do you keep. A proper leverage and a, I wouldn’t say risk free, but risk mitigated family bank. I mean, should you suck all your cash value out and go buy a Porsche?
[00:08:27] Vance Lowe: That’s a hard question. And each family, each structure has to face that because just a few bad decisions can make things go south quickly.
[00:08:39] Vance Lowe: The banking world out there as we know it today, they’re masters at getting the money back. You know, that’s their whole frame. They get every dime back, plus interest, plus their profits. So you’ve gotta have the structure right. Warren Buffet is a great example listening to any of his literature, [00:09:00] any of his talks, when he buys an investment before he even enters the boardroom, he knows more than any single member in that boardroom.
[00:09:08] Vance Lowe: About that company,
[00:09:10] Seth Hicks Esq.: he’s gonna know their cash flow, capital protection, who key players are management issues for sure. And so we need to know the same.
[00:09:18] Vance Lowe: He knows that the structure is what he’s looking for. Can I invest a hundred million dollars and implement a few more procedures and turn that into $200 million?
[00:09:32] Vance Lowe: That’s the game. Whether it’s a hundred million or whether it’s thousands folks, that cashflow has to be there. For instance, let’s say a person goes through a divorce and gets half of the assets. And they borrow a whole bunch of money out of the policies. They have to be careful because if they want to keep the policies open and they borrowed the policies, then there’s gonna be [00:10:00] interest.
[00:10:00] Vance Lowe: For instance, whether it’s with the insurance companies or with this framework here, and all of that has to be managed. Am I going to be able to still receive enough income to maintain that debt and eventually pay it off? If we make a mistake and it goes the wrong way, we have a problem. Can it be fixed?
[00:10:21] Vance Lowe: This is probably the one structure that can fix problems better than any other structure. If you’re in a corporation, you know, and it’s a, a c corporation, or s or any, you know, even LLCs, when something goes wrong, they’re very hard to repair and fix. This is one thing that we can really help in those mistake areas so that it can come back.
[00:10:46] Vance Lowe: It may not be as as big or whatever, depending on the disaster, but we have a lot of doors to open.
[00:10:53] Seth Hicks Esq.: Yeah. There. It’s not a crash into the wall. There’s a long runway of changes that [00:11:00] can be made, but it’s important from the. Outset when you’re approaching your smart risk framework, that you show cashflow support and you demonstrate how you’re gonna protect that capital.
[00:11:13] Seth Hicks Esq.: And I mean, every family is different, but as a general rule, I would say 50% leverage on your cash value is a place you need to carefully protect. And only in extreme circumstances should you leverage past 50%, and that’s when the cash flow returning to your bank is clearly established, highly probable, and stable, so that you’re constantly flowing back into your bank.
[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. Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help [00:12:00] you get unstuck. Are you ready to take action and get your own private bank?
[00:12:05] Midroll: Please visit us at www.privatebankingstrategies.com.
[00:12:13] Vance Lowe: It is almost like a marriage, but it really mitigates and helps prevent emotional decisions, you know, or speculation. People will always come in with ideas, oh man, this is just felt safe. This is just really good. Well, the structure might come in and say, okay, let’s go through the competence.
[00:12:31] Vance Lowe: Let’s get the experience now in here and do the what if questions. And all of a sudden, whoa, the risk went way off the table. The chances of actually getting the money back become very not worth it. In other words, if we can put all and know what all the angles are, as far as our structure, how we put it together, we will mitigate the risks that human error brings to the table.
[00:12:57] Seth Hicks Esq.: Right, right. I find [00:13:00] sometimes representing clients in transactions where they’re going to adopt another type of. Investment or risk or business. A lot of times people fail to address the what if things go wrong. Don’t go according to plan. Don’t fall straight into the business plan steps, and I find that to be one of the places that most people fall short.
[00:13:27] Seth Hicks Esq.: And even successful people. And it was one of the things that a former friend and someone who was a partner who ultimately acquired multiple thousands of doors in apartment complexes over the past 40 years. And I started to venture into the real estate investment game and I built my proformas. And he looked at my proformas from the beginning and he said, well, you’ve got two problems.
[00:13:52] Seth Hicks Esq.: One, your vacancy rate is way too low. You’re gonna have more vacancies with that, especially in [00:14:00] this, and I thought you don’t know what you’re talking about. I’ve got a good manager. I’ve got these leases. They’ve been fully leased up for 12 months. You’re wrong. It’s not gonna be 20% vacancy. It’s only gonna be five.
[00:14:12] Seth Hicks Esq.: And my rents are gonna increase. And he hit two main issues with rental drivers in the market and vacancies, and he was a hundred percent right on. And I ultimately hit some hard, hard places because of underestimating vacancy rates and ability to increase cash flow, poor management, et cetera. You make one of those or two of those decisions on thin margins with your bank and you’ll crumble it.
[00:14:38] Seth Hicks Esq.: So you have to have solid real estate investment with something that you know what you’re doing. A lot of times people go, I’ve had doctors or lawyers or engineers that go, a doctor goes, I’m gonna be a engineer. I’m gonna be a businessman in this context. I’m gonna go do this. And they fail because [00:15:00] they’re good at being a doctor.
[00:15:01] Seth Hicks Esq.: They’re not good at being logistics. Truck operations or so on. So that’s one of the things that I think it bears mentioning to folks as they build the smart risk framework is that there are opportunities for investment, their additional business endeavors. They need to be well planned for, well thought through, and have legitimate action plans and, and business plans or.
[00:15:26] Seth Hicks Esq.: They may find themselves in challenging situations. Thus, another stop loss is the 50% leverage. If they took a hundred percent of their cash value and leveraged into a new business opportunity, and things don’t go the way they want, they’ve just sunk their entire family wealth system as opposed to healthy leverage.
[00:15:46] Seth Hicks Esq.: Conservative leverage things that they definitely know what they’re doing in, and you build a cash flow. That’s how you become a hundred year wealth perpetuating family.
[00:15:56] Vance Lowe: And you know what I, I want to just step in here, folks. [00:16:00] Susa has said some things just here in the last five minutes that you need to rewind and re-listen to, and I’m gonna add upon that.
[00:16:09] Vance Lowe: I’ve been in the investment business or helping people get to a point for over 40 years now, and the main problem that people face is they buy into something, they get emotionally involved. I just had one this morning with a client that I talked with. I asked him about his assets. He had borrowed money from a, an insurance contract and put it with an investment ’cause he didn’t know, he hadn’t been taught anything else.
[00:16:38] Vance Lowe: So he said, I’m gonna invest the money. So I started asking him questions. What is the guarantee on this? Well, there’s not. What’s the collateral on this? Well, there’s not, and I literally had to shut down because he started thinking that, gosh, you know, you’re picking my investment apart. And time and time again, I’ll have a client [00:17:00] come up and say, oh, I need money.
[00:17:02] Vance Lowe: You know, I need a loan for this, for that. I’m gonna invest in this. And I said, well, let’s talk about it. What Seth pointed out. His story when he was in real estate is that he used a guru. He went to somebody who was not biased, could point him into the right directions. Folks, if you would just pick that up right there.
[00:17:23] Vance Lowe: When you look at a hot investment and it is attractive, you have got to get second opinion. Someone who has their head on straight is not as motivated as you so that you can ask the hard questions and then you can decide.
[00:17:39] Seth Hicks Esq.: You have to also be smart enough to follow the advice. As I explained, I did not believe that his wisdom and counsel was accurate with my particular investment, but he was because he had much more experience and thousands of more real estate properties owned than I did, and so I [00:18:00] would’ve been smart to listen to his advice.
[00:18:02] Vance Lowe: So a doctor has to go to a doctor. My son, when he was younger, had a hernia and I got references, you know, to the surgeon on a hernia, and I got told by a surgeon, well, this is the surgeon’s surgeon. Everybody thinks this guy. The metroplex is the absolute best. So I went to him and he gave me some options, okay?
[00:18:26] Vance Lowe: Don’t go to your CPA and try to get financial advice, okay? Don’t go to the wrong person. Go to the person that has the experience in that area, in lending or whatever else. So yeah. We’re, we kind of switched here. No, it’s,
[00:18:43] Seth Hicks Esq.: it’s important because it bears, you know, repetition in our discussion in that. You, you just nailed it.
[00:18:51] Seth Hicks Esq.: I mean, if you want to get your banking right and your family banking dialed in, I don’t see any other practitioners in [00:19:00] the country teaching people how to bank. I, I see none of it, even with some of the most well-known folks in infinite banking, concept banking, that they do not teach people how to bank like we’re describing now.
[00:19:15] Seth Hicks Esq.: We are the only ones,
[00:19:16] Vance Lowe: and that’s sad. I mean, it’s, it’s good for us. It keeps us going, but folks, there’s so much more to money. There really is so much more that you could do without working any harder. You know, all we’ve gotta do is work smarter. All we have to decide is who’s gonna end up with the money, you know?
[00:19:36] Vance Lowe: And structures like this make it just totally private. Allow you to exist with a more hostile government. So I think this is something that you need a better look at. You need to dig into this type of structure and outline. If you haven’t done it, we’ve got offers and that Seth can talk to you about. But I think this is critical [00:20:00] that people understand the opportunity is still here.
[00:20:05] Vance Lowe: For you to become financially independent, but you can’t do it the way you think you’re doing it now.
[00:20:12] Seth Hicks Esq.: Yeah. I think it’s a good place for us to segue and we’ll get into what a generational blueprint looks like in the next episode, and teaching people how to create a hundred year family bank folks, if you wanna learn more about what we do, about a hundred year family bank.
[00:20:30] Seth Hicks Esq.: About the seven pillars of our private banking strategies, go to private banking strategies.com. That’s our website. And on the website you’ll be offered a free book that Vance and I author called What the Banks Don’t Want You to Know That will help you create wealth and for putting in your name and your email address.
[00:20:49] Seth Hicks Esq.: That book will be available to you. PDF or audio version, you can listen to it on the go. And we will also send you important emails with new [00:21:00] podcasts and resources for your education in return. When you begin to dial into our content and you begin to listen to these podcasts, you’re going to know real quick if this system and strategy resonates with you or it doesn’t.
[00:21:15] Seth Hicks Esq.: And if it does resonate with you, you’re gonna have an opportunity to schedule an exploratory call with Vance In the emails that we send you. That’s the only place you’re gonna find his calendar link. And so if that information and this educational content resonates with you, it’s something you wanted to dive deeper into, tune into the next podcast, but also schedule an exploratory call with Vance in the email that we’ll send you when you put your name and email into our website.
[00:21:40] Seth Hicks Esq.: Vance. Any other final comments?
[00:21:42] Vance Lowe: I think that’s it. I’m just looking forward to getting onto the next topic. I just love this stuff. It works and it can work for you
[00:21:50] Seth Hicks Esq.: folks. We look forward to seeing you on the next podcast. Bye for now.
[00:21:54] Outro: Did that story feel like it was about you? Do you feel you should be making [00:22:00] more progress toward your financial goals?
[00:22:02] 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.
