[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 an 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] Seth Hicks Esq.: Hello, and welcome to Private Banking Strategies Podcast with Vance Lowe and Seth Hicks.
[00:00:42] Seth Hicks Esq.: Vance, how are you today?
[00:00:43] Vance Lowe: I’m doing great, and I’m pumped up about our discussion. We started a new discussion on our last podcast. We’re gonna continue that today, so I’m just looking forward to it.
[00:00:54] Seth Hicks Esq.: Me too. We’re excited about smart risk framework, and it’s a cornerstone of private banking [00:01:00] strategies that people need to understand.
[00:01:02] Seth Hicks Esq.: Smart risk framework protects your capital, avoids speculation, keeps you from making emot- emotional investment decisions, and makes sure that your family banking system will be preserved over generations and turn into a multi-million dollar reservoir for you and your family. And so we’re gonna talk about some smart risk filters today.
[00:01:27] Seth Hicks Esq.: And every opportunity, whether it’s real estate or business, any type of internal family loan, it must have passed some filter test, and the first filter test is cash flow support. Tell us about cash flow support and why you need cash flow when you deploy your cash value.
[00:01:44] Vance Lowe: Okay, great. So let’s decide we’ve got the opportunity.
[00:01:47] Vance Lowe: Maybe it’s real estate, maybe it’s funding a business, and cash flow is absolutely critical. This means if I take money, if I borrow money or I use money and I put it in this business or this [00:02:00] opportunity, what cash is coming back into my control and how often? And so it’s, in order to even get a loan, there’s loan committees with banks or lending institutions.
[00:02:11] Vance Lowe: They all go through this process, and it narrows down to, okay, is there a clear source of income, reliable income that can make these repayments? If there is, then they can a- approve the loan. But if they have any question or any doubt that cash flow is not going to be there, it’s usually a decline. If not, they’re gonna ask for more upfront c- capital or more collateral or something like that.
[00:02:38] Seth Hicks Esq.: When the cash flow is predictable and reliable, we’d be talking about real estate investment, for example, with rental cash flow coming in. We might be talking about a franchise like Chick-fil-A, and the sales on chicken are creating cash flow that comes in. So you deploy a certain amount of your cash value to open a [00:03:00] Chick-fil-A franchise, and you’ve got- Pretty well stable statistical evidence from Chick-fil-A on what type of returns is gonna be there.
[00:03:08] Seth Hicks Esq.: You know what’s gonna be the repayment source for cycling that money back into your policy. And if you don’t have that, let me just make sure I understand for our audience, if you don’t have a pretty clear predictable cash flow support, should you be emptying your cash value to entertain that opportunity?
[00:03:28] Vance Lowe: No.
[00:03:28] Seth Hicks Esq.: Or if you happen to be, y- let’s say that you are a contractor and you’ve got an opportunity for a new business that is RV park You’ve never done an RV park. You know how to build homes, but is that one that you should just jump off into headlong, or how would that one fit in?
[00:03:47] Vance Lowe: I wouldn’t jump off and put all my eggs in that basket.
[00:03:51] Vance Lowe: I would do research, find out how other investors are doing, if they’ll share information with you, and put your toe in the water first, or a foot. [00:04:00] Maybe go into a partnership on a minority basis or something and see how they’re going and how they work, how they operate before you take the opportunity.
[00:04:08] Vance Lowe: Warren Buffett, you know, he’s probably hands down one of the best investors America has ever seen, past, post, present, whatever. He has a rule. He said, “Number one rule, get the money back,” when he does an investment. Okay? And then of course, number two is making a profit and understanding the business in such a way that the control is there.
[00:04:33] Vance Lowe: It’s almost a sure thing. So really understanding that investment, protecting that capital, because a lot of investors rely on him. He commands hundreds of millions of dollars when he does investments. He’s gotta make correct decisions. Not to say 100% of them always work out, but the vast majority do.
[00:04:56] Seth Hicks Esq.: To make sure that you get the original investment [00:05:00] back and that it’s secure or collateralized or that there are other systems in place, you’ve got lower risk and more potential for making a mistake, but not getting wiped out by the mistake.
[00:05:12] Seth Hicks Esq.: That’s capital protection. Don’t lose the money, and the opportunity has to protect the core principle, not gamble it. That’s Warren Buffett’s cornerstone principle. Right.
[00:05:23] Vance Lowe: Yeah, so that’s capital protection. That’s one of these, the topics we’re talking about. That’s absolutely critical, folks, is that we’re gonna do it, the capital’s protected, that income is going to come in, and if there’s a downturn, if there’s a dry spell, we’ve gotta have a well where we can keep it going and we can keep it shored up.
[00:05:43] Seth Hicks Esq.: And if you’re not losing money and your capital is still growing in your policy and you’ve got velocity working back into your cash reservoir, that cash value and dry powder is only gonna increase, and increase your ability to deploy that capital when [00:06:00] something comes along that you really understand and can take advantage of And you mentioned that before, I mean, opportunities will always be flowing towards you like a river coming down a snow-capped mountain.
[00:06:13] Seth Hicks Esq.: There’s always going to be water flowing down. There’s another opportunity coming your way. This isn’t the o- the last investment possibility that you’re gonna have. This isn’t the best deal ever in your life. This isn’t miss it now and you’ll never have the opportunity to catch that type of investment again.
[00:06:31] Seth Hicks Esq.: How many times people are deceived into thinking there’s never gonna be another opportunity? There will be another opportunity, and it’s better to protect your capital than make a bad decision and wipe out all your cash value.
[00:06:43] Vance Lowe: So competence and experience are gonna be vital. Once we’ve secured and we’ve got…
[00:06:48] Vance Lowe: we know we can protect, uh, the capital, we could still, you know, screw things up if we don’t have the competence and/or the experience. So in our society, the best way for [00:07:00] me to explain this is we’re pre-programmed online, all these sales ads, you know, “Buy this and save. Oh, this is on sale now. You gotta act now.
[00:07:09] Vance Lowe: Come and get it right now or you’ll miss out.” We’re programmed for that. Don’t let that fool you. Seth, you just said it again, that the opportunities are always gonna be there. There’s a rule in my mentor’s book, R. Nelson Nash’s book. One of those rules that he goes by is called the golden rule. That golden rule everybody thinks if that’s religious, do unto others as you’d have…
[00:07:34] Vance Lowe: No. The golden rule actually means he who has the gold makes the rule, and if you have the asset, if you have the gold, if you have the cash value, the opportunity will come and find you. Right. He lived by this. He proved this out time and time again. He was a forester. You wouldn’t believe the amount of forest land he was able to accumulate for pennies on the dollar [00:08:00] just because he had the cash when somebody else needed it.
[00:08:03] Vance Lowe: The same thing here, an opportunity will come along, and you’re gonna know it’s gonna be the right thing to do.
[00:08:09] 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?
[00:08:24] Midroll: 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.
[00:08:40] Seth Hicks Esq.: You explained the, uh, e- example of the forestry business and Nelson Nash and his nephew. And so when his nephew wants to start financing other operators in the forestry business with heavy equipment, they understood exactly how it works.
[00:08:56] Seth Hicks Esq.: They understood how long equipment takes to run out, what, [00:09:00] how much money you need. And so they were very well experienced in that business before they started deploying millions of dollars of capital into the equipment financing for other operators.
[00:09:12] Vance Lowe: That’s, it really is a perfect example, and that example is written out, folks.
[00:09:14] Vance Lowe: We’ve done podcasts on part of that, but the whole structure was he took a young person whose dad died. He taught him how to do, you know, self-banking and self-setup by running his own forestry business, and it taught him how to purchase his own equipment, and he expanded from that, just like you said. Now all of his buddies, all the people around him, he could immediately finance their stuff once that money had come in.
[00:09:42] Vance Lowe: He never stole from himself. He always, always came back in. And now he’s in the, like I said, he’s got millions and millions of dollars lent out, and volumes of money coming in off of equipment because he knows what he’s doing. He knows how to do it.
[00:09:57] Seth Hicks Esq.: Yeah, hopefully this discussion and [00:10:00] conversation sparks ideas in, in, in your mind, our audience and listener, with your expertise and with the things that you understand.
[00:10:09] Seth Hicks Esq.: One good application, we have numerous doctors, dentists, chiropractors, lawyers within our clientele, and one dentist who comes to mind understands his practice really well and has expanded his practice into the production and manufacture of certain equipment used in the dental services. And so rather than going to a third party and paying retail pricing on things that have to be built for his clients, he decided to just buy the printers and the machines and the business to manufacture that equipment and can dial it in right there in his facility for his clients.
[00:10:49] Seth Hicks Esq.: That’s another perfect example of having expertise in what you’re deploying your investment capital into. So he’s taking his cash value and expanding his business [00:11:00] into something that dovetails very well with the dental practice
[00:11:04] Vance Lowe: That’s true, and that takes us right into the next item. Because he’s so good at it, because he knows what he’s doing, he has the funds to self-finance.
[00:11:13] Vance Lowe: Now, folks, all this is about putting money to work and then getting the money back. The volume of return, the cash flow coming back in is ever increasing. If you do that the right way, you can make that completely tax advantaged as well. But that goes into the next item. Once we’ve got the expertise and the experience flowing for us, there’s a little bit of what’s called downside planning.
[00:11:39] Vance Lowe: What happens if the clientele for this particular product goes off a little bit? What if it has to be altered because the new, uh, things that are happening, there’s new improvements n- need to be made? So in every single opportunity, th- there’s some things you have to be able [00:12:00] to do. You have to be able to have what’s called, what, an exit plan, for instance.
[00:12:07] Vance Lowe: I’ve dealt with clients my whole career who are in business, they’re extremely successful, things are going fine, but they do not have an exit strategy. Right. And so they pass up the very best time, the peak performance of that business to be sold at, for its highest value, they pass it by, and then they wonder why it was worth this on this day, and why can’t I get that out of it now?
[00:12:35] Vance Lowe: Oh, I thought maybe if I kept going, it would just get more and more. No, it doesn’t do that. There’s always gonna be a, a peak and, and, and an ebb or a downturn. So that’s important to know where your- where that exit strategy. What’s the next thing in this we gotta talk about, Seth?
[00:12:53] Seth Hicks Esq.: As far as the investment side of things, I mean, you minimize your risk and potential failure when you’re [00:13:00] a dentist and you expand the practice into a dental equipment manufacturer.
[00:13:05] Seth Hicks Esq.: You reduce the risk when you’re a forester and you begin to bridge your financing into forestry. And so you- the expertise is a huge fundamental need in the asset class. And if the opportunities that you’re developing, you need to, like you said, have an exit plan, also need to understand worst case scenarios.
[00:13:27] Seth Hicks Esq.: When you’re already in the business, you can, you see those coming. You’ve already experienced those. But when you’re the, a brand new real estate investor, you’ve never purchased any investment property, you don’t really know what stress-tested numbers are. You may think that you have 100% occupancy, and you don’t understand the loss that occurs with vacancies, tenant turnover, damage done to properties, increase in property taxes, things that can just destroy your profitability under your ideal s- [00:14:00] scenario that you set up that was fantastic in the beginning.
[00:14:03] Seth Hicks Esq.: So you need to have stress-tested, worst case scenario numbers to protect your capital.
[00:14:09] Vance Lowe: And then like we’ve been saying all along, we don’t wanna commit all the eggs into one basket. We got a million dollar portfolio that we could put to work. Don’t wanna use it all on, uh, real estate investment property.
[00:14:24] Vance Lowe: We’ve got to have a fallback if th- things happen, if all of a sudden it becomes vacant or damage happens to that building And it’s gonna be vacant for a while. How are we going to make the repayment structure during that time? We call it a fallback repayment strategy so that the banks if, or got money lent out, leveraged against our own cash value or whatever else, that those repayments still have to be made.
[00:14:54] Vance Lowe: And we have to have a slush fund or that window where it’s not fully committed, [00:15:00] and we can use that until we can get back on our feet or until we get that vacancy taken care of or that part fixed or whatever. So the fallback, uh, strategy, it’s a protective buffer. So these are all things that we wanna check on this part that we’re talking about right now as far as the downside planning.
[00:15:24] Vance Lowe: What, what can go wrong? How can it go wrong? Do we have the funds to be able to take care of it? Do we have the expertise to bring it back?
[00:15:32] Seth Hicks Esq.: Exactly. Folks, if this content is resonating with you and you want to hear more, go to our website at privatebankingstrategies.com, and there you’ll have the opportunity to use a brand-new tool that we’ve developed.
[00:15:44] Seth Hicks Esq.: It’s an AI tool on our website that allows you to ask Vance or I anything you want. You can dig into various applications of everything that we teach, the entire resources that we’ve published in 200 podcasts and [00:16:00] multiple blogs, articles over a year, that they’re all condensed there. And our AL tool will allow you to be mentored by Vance and I perfectly right there on our website.
[00:16:11] Seth Hicks Esq.: So if this is intriguing you, you wanna learn more, you’re a client, and you want to develop specific strategies, go to the website privatebankingstrategies.com and use the AI tool to develop strategies. And, and let us know how it’s working. If you want more information on a certain content or a certain subject matter, email us at info@privatebankingstrategies.com and give us your feedback and your suggestions on this AI tool or what you’d like to hear more about.
[00:16:39] Seth Hicks Esq.: But we’ve pretty much done a total brain dump from 45 years in, in professional financial management and infinite banking concept there, and my 30 years as a practicing attorney and my private banking strategies knowledge there. It’s all at your disposal. And what would normally cost you 1,000 bucks an hour if you’re [00:17:00] talking to Vance or I on a one-on-one basis, you get for absolutely nothing on our website.
[00:17:06] Seth Hicks Esq.: That should be a great incentive to get your black belt in private banking strategies. Vance, any closing remarks today?
[00:17:13] Vance Lowe: No, just keep learning, folks. Keep moving forward. Don’t just sit idle. Don’t be
[00:17:18] Seth Hicks Esq.: ever looking and not doing. Be a doer Thanks for joining us today, folks, on this podcast. We look forward to seeing you on the next one.
[00:17:28] Seth Hicks Esq.: Bye for now. Bye.
[00:17:30] 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.
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