[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): Welcome to Private Banking Strategies with Vance Low and Seth Hicks.
[00:00:40] Eric (Host): Gentlemen, so good to see you. How are you? We’re good, Eric. Great. Yeah, I mean, it’s, it’s been a little while. I’m excited to get back in the saddle, if you will, if you wanna call it that. And you guys have been telling me that there’s been a lot of questions. You’ve had some meetings and, and different types of webinars and things with clients, and they brought up some questions that you really [00:01:00] wanna address.
[00:01:00] Eric (Host): There’s a little bit of confusion out there. Once you get it one-on-one, they’re clear. However, there’s a lot of people that probably have these same kind of questions, so you want to address those, and you give them me a list of about 10 and, and kind of what spurred this from my understanding is what banking policy.
[00:01:15] Eric (Host): Is the very best one for me. That’s kind of the, the first question, and that’s, that’s what people have been wrestling with. So kinda set the foundation for this.
[00:01:22] Vance Lowe: I’ll start with this and um, uh, Seth, you can kind of kick in, uh, on holes that maybe I leave off, but. When we deal with insurance, everybody has preconceived ideas, you know, past experience, what they’ve been told, everything else, and they’re, they’re dealing with what they think is very professional people who know what they’re doing.
[00:01:43] Vance Lowe: But in the life insurance world, most agents are among the lowest paid people, you know. Job, different job industries, uh, and they’re taught what to say. And one of the things they try to do is they’re taught how maybe an illustration [00:02:00] shows their company to be an advantage. And so they sell the importance of, you need to look at these numbers, you need to look at this picture and these illustrations, when in most cases it doesn’t have anything to do with what a person’s goals are.
[00:02:14] Vance Lowe: And so everybody gets lost trying to figure out which one is the best for me. So that’s why we, we’ve come up with this topic. Uh, Seth, you might have another couple of examples or something of, of why. People kind of get lost in this.
[00:02:31] Seth Hicks Esq.: Sure. And we point back to the seven pillars of private banking strategies.
[00:02:34] Seth Hicks Esq.: Eric. There are seven cornerstones for which we provide these services. Um, asset protection, financial privacy, tax-free growth, legacy, uh, transfers. And so, like Vance said, each person has it their own individual motivations. And a lot of times when we compare one life insurance company to another life insurance company, illustrations we’re [00:03:00] way off in the weeds, and that doesn’t necessarily match someone’s motivations for why they’re structuring this, uh, this plan in the first place.
[00:03:10] Seth Hicks Esq.: So that’s kind of a general overview and something that we have to keep in our awareness is that each person’s individual needs is going to vary person to person. Their motivations are gonna vary person to person.
[00:03:22] Vance Lowe: Yeah.
[00:03:23] Seth Hicks Esq.: Are you using your private banking strategies as a retirement strategy? Are you using it as a asset protection technique?
[00:03:32] Seth Hicks Esq.: Are you using it for both? So there’s those type of questions are litmus tests for each family’s structure.
[00:03:41] Eric (Host): Okay. So let, let’s, let’s take a step back. Considering all that you’ve already said seven pillars, how it’s all incorporated. Let’s break it down to the basics. First, explain to folks what is a banking policy.
[00:03:53] Vance Lowe: Alright, I think that’s a great place to start. Banking policy. Is an old time contract [00:04:00] that used to solve the banking equation in the United States. I mean, today we can hardly even imagine that the United States didn’t have branch banking, you know, a, a bank on every corner. Okay. But it didn’t. As a matter of fact, when I was growing up, they didn’t even have a bank in our town.
[00:04:19] Vance Lowe: We had to go almost 30 miles to a bank in order to use that bank. So where did Americans park their money? They parked them in these contracts with life insurance carriers because that’s where the beginning started. That’s where all the money was put, and it was under a strategy of being independent, self-aware, self-reliant.
[00:04:43] Vance Lowe: Back then, when our country was being settled, people could cross the country, go out into the wilderness and they would survive. That’s a lost art today. That could not happen today with over 90% of the people. They would perish within the first 30 days. So. Let’s explain the, the contracts, the policy [00:05:00] today, they’ve evolved a little bit and they evolve all the time, so we’ve gotta talk about the contract, not as well.
[00:05:08] Vance Lowe: Everybody thinks life insurance is, but more that this contract will work as a money warehouse, okay? It’s a safe place to store money until we can put it to work. The people that we teach understand that money has no value unless it’s moving and working for us. People are shocked when they say, well, I’ve got 4 0 1 Ks.
[00:05:31] Vance Lowe: I’ve got portfolios and stocks and bonds and mutual funds. I’m sorry to say your money is asleep. 100% asleep. You’re trying to earn interest, but you have to keep that money in those accounts. It’s the people who have the money that are going to make the money, and we use a doubling factor that, uh, they’ll double money so fast, but they’ll only pay the investor.
[00:05:54] Vance Lowe: What they can get away with and the investor takes all the risk. Yeah, so the components, we, we wanna talk about that [00:06:00] a little bit because these are specially designed today. They have to be put together correctly and it’s all over the board. Everyone is out there now, uh, thinking about, Hey, maybe I can sell more product using the infinite banking idea or private banking strategy idea.
[00:06:17] Vance Lowe: When in fact, what’s critical, this is only the money warehouse. Okay? It comes along with the strategy of how do we bank, how do we use money? How do we get the money back?
[00:06:28] Eric (Host): Okay, so let’s stop there for a minute because that, that’s a great point. Since learning from you guys, I was shocked and, and I hate to admit that I like TikTok, but.
[00:06:38] Eric (Host): I’m on TikTok. Not, not me personally. I just like to watch things on TikTok and I’ve heard more and more people saying, oh, you can be your own bank and blah, blah, blah, but it’s, it, I feel a hundred percent, like you were just saying, it feels like a sales tactic. So let’s, let’s talk about how that banking policy is put together because as, as important as is for all the strategies, let’s talk about how that’s put together so we know how it’s different than [00:07:00] what people are.
[00:07:00] Eric (Host): Just, you know, that 62nd snapshot on TikTok that is gonna change someone’s life forever.
[00:07:05] Vance Lowe: Alright, let’s do that. So the contracts are put together, they are life insurance, but we reverse engineer them. It’s not about solving your death benefit needs. You’re told right up front we are not gonna solve any death benefit needs.
[00:07:21] Vance Lowe: Mm-hmm. But it will come with some insurance, but it will be the absolute minimum we can get away with without it causing a modified endowment We call the Mex. A MEC would be, uh, an an instrument that is taxable and traceable by government. If it is a non Mac, then we get all the tax favored treatment on these contracts.
[00:07:46] Vance Lowe: So sometimes that bar moves a little bit, they move a little bit different with each company because government is not organized and they’ve come up with the MA numbers independently for each company. And so it’s, it’s very hard. [00:08:00] And that goes into looking at numbers and things like that. Every company is, is very hard.
[00:08:05] Vance Lowe: And when you’re told to look at the illustrations, we’re not even qualified to look at it. We don’t even know what we’re looking for. We, we see a number and we assume that, oh, that’s a good number. Therefore it’s better than the other companies. So let’s make a decision on that. And it’s like the difference of yield versus average rate of return.
[00:08:23] Vance Lowe: If you ask the right question, you get the right information. Mm-hmm. If, yeah, it’s the wrong one. So the first part is ordinary base, premium, ordinary, whole life designed to be paid throughout a lifetime. Can we need some of that? Our commitment to our clients is to build this contract so efficient that it will go over a hundred percent.
[00:08:45] Vance Lowe: Which means like in year five, if you knew that you had an investment that was guaranteed for a minimum amount of performance, that in year five, every dollar you put in, you’re gonna make a dollar five or a dollar 10 or a dollar 20. How many of those [00:09:00] do we want? Mm-hmm. Especially if it’s tax advantaged.
[00:09:02] Vance Lowe: So putting one of these contracts together is like setting up. A company and all companies, all American history of business is stemmed from the experience of life insurance and base premium base, whole life insurance. A new company usually is not profitable until five years, three to seven years. And that cash value in the base premium that appears somewhere between three and and five year period.
[00:09:29] Vance Lowe: Well, that’s only one component and that’s a small component.
[00:09:32] 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?
[00:09:48] Midroll: Let us help you get unstuck. Are you ready to take action and get your own private bank? Please visit us at [00:10:00] www.privatebankingstrategies.com. The father.
[00:10:04] Vance Lowe: Of this idea r Nelson Nash, he did a lot of experimenting and he came up with, you know what, we’re gonna buy one of these high cash value policies and we’re gonna pay premiums for five years.
[00:10:18] Vance Lowe: And after five years, then we’ll start the banking process because then there’s cash value and we can start using the money in our bank to self-finance things. Well, 20 years ago when uh, guys like me came on the scene, we wanted to speed that up I bet. And so there were, because we dealt with so many different companies and we knew insurance law and the advantages inside and out of different, uh, strategies for life insurance.
[00:10:51] Vance Lowe: We easily came up with, you know what, if you attach to that policy, what’s called a paid up editions writer, you can speed up the process. A long story [00:11:00] short is that the proper mix would be a 60 40 split, 60% into a paid up editions writer for only a short period of time, and then the 40 in the, uh, regular whole life and our successful clients.
[00:11:18] Vance Lowe: Wish that that would be reversed. And the reason is we cannot get the paid up editions. Writer to a hundred percent efficiency taps out about 92, 90 4% in every case. No matter where you go, no matter what the percentage is, it’ll never, you know the amount that you have access to, but it is that writer means it will reach out and purchased.
[00:11:43] Vance Lowe: Life insurance in one payment and you own it outright, never any more expense from that time forward. So if we were to have a $10,000 premium, 4,000 would be base, 6,000 would be paid up editions, writer, and it’s that writer that creates [00:12:00] immediate, upfront what we’re gonna call business profit or cash value.
[00:12:05] Vance Lowe: No, you know, any startup company, if they could pull 50 to 60% out in year one is gonna say, Hey, we had a great startup here. Well, the market out there has picked up on that, and they figured out a way to change those splits. But it takes you away from banking and it puts you in the, the, the now moment. And so you’ll see things on the internet that go, you know, 90 10 splits.
[00:12:30] Vance Lowe: You need to put more into the paid up editions. Writer, you’re getting ripped off. Well, there’s no money in there. You know, it just, it is just effective for the first year, the first year or two. But hopefully people are setting up these strategies for a long term lifetime. Mm-hmm. And these contracts, if they’re good, all come out.
[00:12:52] Vance Lowe: To be the same. I have all the different companies we represent, so, uh, I don’t get lost in the weeds. I can’t tell the difference [00:13:00] between, between them really as far as the performance goes. So then we might add a little bit of term writer. The term writer, the effective is buying more permanent. And it allows, like the first contracts I, I did on myself.
[00:13:18] Vance Lowe: I had a little bit of term writer in there, and when I borrowed money out, I could pay it back plus the interest that I charged so I could actually add back more into the policy that I borrowed out. Because it acts like it’s permanent that the term rider, and it gives you that upfront boost. We only need that for like four years.
[00:13:37] Vance Lowe: And then we leverage off that. We, we u go down to the, uh, lower amount, what the, uh, permanent or base premium in year five. Now, in year five, the bay can go over a hundred percent. Now we’ve got a policy that’s rocking along at above a hundred percent, and so. The cash value, if it’s not caught up yet, it will.
[00:13:57] Vance Lowe: It’s just a mathematical equation.
[00:13:59] Eric (Host): Mm-hmm. [00:14:00] Okay. So you were talking about the components needed. For the, the banking policy. And so far I’ve heard whole life. Right. And then you’ve got the paid up editions, rider and then a term rider. Are those the components you’re talking about or are there additional components as well?
[00:14:11] Vance Lowe: Those are the main components. In special instances, there are additional components you may need, waiver of premium, you may need a guaranteed growth RI writer. So it’s all individualized, like you said, right. Uhhuh. Okay.
[00:14:24] Eric (Host): Okay. All right. Well, I mean, it, it, obviously you guys have covered a ton of stuff before.
[00:14:30] Eric (Host): Um, and this is a great breakdown and I’ve heard you say this before, I already know this, but I know this is a question that has come up. Will the contract make you an owner of the life insurance company?
[00:14:39] Seth Hicks Esq.: Sure, yeah. We, we focus on companies whereby you are an owner, mutual companies and as opposed to stock companies.
[00:14:48] Seth Hicks Esq.: And there are a multitude of reasons for that. Um. But ultimately, I mean, the, the companies that we’re, that we’re utilizing, they’re all similarly [00:15:00] situated, and as Vance said, over the long term, they’re pretty much gonna perform in the same type of trajectory. Some may outperform initially, but ultimately years 10 and ongoing.
[00:15:13] Seth Hicks Esq.: If they’re pretty well leveled out.
[00:15:14] Vance Lowe: Yeah, and, and the advantage of being owners is that you get profits, you get at the head of the line, you get preferential treatment, and all these cases when you go to borrow money. There’s only two questions asked ever. It’s how much do you want or do you want to send?
[00:15:29] Vance Lowe: There’s no payback, there’s no reason as to why do you want this money? Mm-hmm. If you borrow your own money out of a real bank, that’s the first question they’ll ask. And if they don’t like the answer, they don’t have to give you the money, even if it’s in your account. Yeah. So that’s why an advantage. So all of our companies will produce the ownership.
[00:15:50] Vance Lowe: So in addition to the guarantees, these are, um. High guarantees. These guarantees pretty much track realistic [00:16:00] market growth after taxes. So we’re, we’re right there in the guaranteed market. This whole strategy and these policies are based off of the guarantees. So when we project, we don’t project the profits that are coming in.
[00:16:13] Vance Lowe: But the key and everybody needs to know, we deal with companies that have never not paid an annual. Profit and they’re called dividends. Okay. And they can be added in or increased death benefit or whatever else.
[00:16:26] Eric (Host): Okay. You, you brought up death benefit. Earlier you said that you’re not solving for death benefit.
[00:16:30] Eric (Host): Mm-hmm. And we’ve talked about that a little bit before, but break that down a little bit for me, because the insurance has a death benefit. Right. But you’re not solving for death benefit needs.
[00:16:39] Vance Lowe: Let’s say we’ve got an average 45-year-old, you know, they wanna do $25,000 into their bank each year. The minimum death benefit, if they’re really good and healthy.
[00:16:49] Vance Lowe: Might be a half a million dollars, okay? Mm-hmm. And so that’s the minimum that we can’t go below that or we break this MEC rule and things are taxable. Also, you can’t put [00:17:00] more than when you started. When you set the contract, you never can put additional premium in. So if it’s 25,000 a year, that’s it.
[00:17:08] Vance Lowe: Can’t put 26,000 or you can’t put 20. $5,001 we’re that tight up against the Mac wall to be more efficient. Okay, got it. So we went back right up there. We don’t leave any unnecessary expense. Annualized is absolutely critical. Life insurance deals with Annualization, so everybody else pretty much deals in the rear.
[00:17:29] Vance Lowe: You know, you invest everything, you get your profits at the end of the year, not life insurance when you pay the annual premium. You get the profits and the cash value upfront at the beginning of the year. Everything is upfront, but when you borrow loans, they’re gonna charge you a year’s worth of interest upfront.
[00:17:44] Vance Lowe: The advantage is that as you make payments back into your bank, you wanna pay yourself back for those loans they have to pay back the unearned interest. So there’s no difference in the money you’re putting back in. You have a hundred percent access, whether it’s going for loan [00:18:00] interest or wherever it’s going.
[00:18:01] Vance Lowe: You have re-access to exactly the same amount, if not more. So the dividends, the way we set it up at the beginning is we have it by paid up additional insurance. One time payment because that adds to the cash value and that increases the death benefit. I just looked at a 28-year-old, I just did one on on on these guys, and they’re doing $20,000 a year.
[00:18:23] Vance Lowe: You know, he’s close to a million dollars of death benefit. Wow. But if he just keeps track, he’ll have closer to $5 million at death and death benefit. Because of the paid up editions. This seems to be the best bang for the buck and that’s why we do it. It’s important that you understand as you learn and you listen, that you leave the old behind, you leave the falsehood, the noise behind, and you just go forward.
[00:18:50] Eric (Host): Alright, Seth, let’s give ’em some contact information so they can get that policy today.
[00:18:55] Seth Hicks Esq.: Sure, yeah. If you’re gonna find [00:19:00] us@privatebankingstrategies.com. Private banking strategies.com and there, when you hit our website, you’re gonna have an offer for our ebook that’s called What the Banks Don’t Want You to Know, uh, that comes to you at A PDF or an audio version.
[00:19:12] Seth Hicks Esq.: Your choice if you like to listen to things on the go, we’ve made that available for you. And if that resonates with you, we invite you to listen to some more podcasts. We’ve got a whole portfolio of podcasts available to you on the website. You can subscribe in your favorite platform. Go through some of that content and listen to things that catch your eye, and if our ebook and our podcast resonate with you, then we invite you to take an exploratory call with Vance where you begin to dig into how this might apply for you.
[00:19:42] Seth Hicks Esq.: Ultimately, that results in an eight year analysis where there’s quite a bit of work done for you, particularly with your financial circumstances, your family goals and motivations. We’ve. Roadmap this out and tell you exactly what to do, step by step and get you rocking and rolling. That’s, that’s our [00:20:00] process.
[00:20:00] Eric (Host): All right. Fantastic. Gentlemen, great information. Thank you for answering questions. Those that are listening, you can always email in questions, get to the website, find some contact info there for emails. Email some more questions if you’ve got more, and then I just encourage you to, to reach out and make the phone call to, to talk to these guys in person.
[00:20:16] Eric (Host): Uh, gentlemen, always a pleasure. Thank you so much.
[00:20:18] 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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