[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] Seth Hicks Esq.: Hello, welcome to Private Banking Strategies with Vance Low, and Seth Kicks Vance.
[00:00:42] Seth Hicks Esq.: How are you? I’m doing great today. I think we’ve got a good topic. Absolutely. So we’re doing a deep dive on how policy loans work, various uses of the capital that you’ve got stored up in your bank. Let’s say Vance, that you’ve got a. A financial [00:01:00] crunch and your cashflow situation changes. Let’s say you’re a real estate investor and you’ve got some type of catastrophic loss and you’ve got a deductible issue and your policy loans that you’ve got structured are a a little too heavy.
[00:01:15] Seth Hicks Esq.: What do you do? Do you have to pay those policy loans back? Is it gonna repossess the car that you bought with that money? What do you do if you have a cash crunch?
[00:01:25] Vance Lowe: Okay, see, that’s the world that all of us face right now. It’s reality. We never know from day to day what’s what’s gonna happen. And financial crunches are huge.
[00:01:37] Vance Lowe: The benefit of self financing. We still finance, we still pay, make payments. That doesn’t change. Only the address changes to a payment center that we control, so the money comes back into our control. So let’s do a car payment. If I’ve got one car, I’ve been able to finance myself [00:02:00] and I’ve got another car with Honda Finance and they’re 500 bucks a month, and I have suffered an accident and I can’t work.
[00:02:08] Vance Lowe: And I can’t make those payments right now. So how hard would it be for me to call up my own bank and say, Hey, I gotta postpone payments for a while. I could still accrue the interest. You know, that’s fine. It’ll take a little bit longer, but I would enter into my banking system. The way we do that, the payment for, let’s say it’s October, which it is now, for October’s payment, I would put zero.
[00:02:32] Vance Lowe: To be honest, I don’t wanna cheat myself and it’ll totally recalculates our own loan and let’s us catch up later on and no problem. So I get so excited about that. I call Honda Finance and say, Hey, can I miss a payment? And they just start laughing. Heck no. If you miss a payment, you’re gonna get a notice.
[00:02:52] Vance Lowe: You miss another payment. We’re gonna foreclose and come pick up that vehicle. Well, is there any way for me to refinance that? [00:03:00] No, everything’s done. Don’t bother us anymore. Just make the payment. And that’s what you get with automobiles. That’s what you get if you have a furniture loan. Even mortgages are almost the same way.
[00:03:12] Vance Lowe: Don’t get caught up in a trap. When we do have a crunch and we don’t own the loan, if they say, yeah, you can miss the payment. That interest never sleeps on that payment. When we get down to the last payment. You’re gonna get a surprise. You’re gonna get a big balloon payment just because of that one payment.
[00:03:30] Vance Lowe: So thinking that you only owe $500 a payment, it could be $3,000. That interest will compound on itself all the way through the rest of the loan. Think of a mortgage, because so many people, when they get in trouble, when they get behind on their payments, the mortgage company finally says, okay, we’ll just stay current.
[00:03:50] Vance Lowe: Now. Two payments missed. On a 30 year mortgage after you’ve paid for two or three years, I show this example about $1,100 a month [00:04:00] payment, $64,000 balloon payment at the end. You control all of your own debt, your own loan. So if something comes up, you’ve got breathing room, okay? You’ve got all the time in the world and you can totally self restructure.
[00:04:19] Vance Lowe: The loans. Say you lost your job and now you know, like COVID, you got another job, but it’s only half the pay. So we don’t care when our loan, our personal loans get paid off. What we care about in making money from our policy loans is that the flow is called the volume of return. So that volume comes down.
[00:04:40] Vance Lowe: But as long as it keeps coming in, we’re happy. Our money is working for us. It’s surprising, Seth, that I show people on a $10,000 purchase of a car note at $500 a month and eight and a half to 10% interest. You know, I buy those loans all day [00:05:00] long and I ask people why do I, am I so interested in those loans?
[00:05:04] Vance Lowe: And they say, well, gosh, you’re making eight and a half or 10% interest. This is where the people heads are. Okay. It’s the interest rate. No. It could be zero interest and I wouldn’t dampen any of my enthusiasm. I would have to come up with $10,000 to get that loan. Okay. So that would be my money at work.
[00:05:24] Vance Lowe: But the payment’s 500 bucks, 500 times 12 is 6,000. To find the volume rate to return, you take that 6,000 and divide by the money at work. How does a 60% volume rate return sound to you? Really good. Yeah. That’s That’s amazing. And that’s it. That’s the secret of lending. That’s why there are lending companies why, that’s why it’s the most lucrative, profitable business profession to be in.
[00:05:49] Vance Lowe: The banking, the lending side, and it all stems from the cash value
[00:05:53] Seth Hicks Esq.: and you and creating in that system that you talked about. Cash flow and volume, rate of return. You’re interested in the cash flow [00:06:00] payments. On that
[00:06:00] Vance Lowe: note, that’s because that’s $6,000 back in my control. What am I gonna do once I get that 6,000?
[00:06:07] Vance Lowe: Am I gonna burn it? Am I gonna hide it under a mattress? No, I’m gonna go buy more debt and get 60% on that. With one $10,000 investment, I can easily make $80,000 in five years tax free. Never contribute additional pocket money or other type of investment money just by its own momentum.
[00:06:27] Seth Hicks Esq.: As far as a absolute requirement.
[00:06:30] Seth Hicks Esq.: You pay your policy loan, you have the flexibility. That’s what we’ve described. You have flexibility as the banker to restructure loan terms that. Fit within your cash flow, especially if you have a challenging season or a moment and you set the repayment terms. You could start the loan at 20% interest and then modify the loan terms and make it 10% if that is necessary to fit your cash flow.
[00:06:53] Seth Hicks Esq.: So you effectively are. Able to change terms on the loan, [00:07:00] and you’re never gonna deal with foreclosure, you’re never gonna deal with repossession. You’re never gonna deal with the default and have things disappear. It’s all within your control, right?
[00:07:11] Vance Lowe: Yeah. And I have fun with this. I’ve never rejected a loan to myself.
[00:07:17] Vance Lowe: I’ve never asked for tax returns or what I need to use the money for. Do you ever do a credit check on your borrower? I never do a creditor
[00:07:26] Seth Hicks Esq.: check. You don’t have much due diligence on your loans.
[00:07:29] Vance Lowe: Not to myself. You know, when you start expanding to your kids and ex extended family, then a little bit more caution and maybe a little bit of of collateral comes into play because all of the loans have to be good.
[00:07:43] Vance Lowe: The, uh, the bank still has to get all the money back. But let’s take that one step further on your question. Let’s say I’ve lent to my, uh, niece needed a car. And she came up with a decent down payment, but she couldn’t come up with all of it. So I financed the car and the title came to me [00:08:00] and she’s painted off regularly.
[00:08:01] Vance Lowe: Everything helmet. Well, she gets involved in an accident, she can’t work. So she calls me out and tells me the problem and I go, Hey, your family. How long do you think it’ll take before you can get back on your feet? Oh, maybe up to six months. Well, why don’t we postpone payments for six months now? The interest is gonna stay there and accrue, and then at that time we can decide whether you wanna pay the same payment, if you’ve got another job, whatever else.
[00:08:27] Vance Lowe: But we’re gonna work with you so that by the time you get that car paid off, it’s like you never missed. I have a deal with all of my people that they’re also earning equity in the family bank. You could end up actually having more equity in the family bank under that circumstance. So you also gotta talk about the other, Seth, what happens if it is their fault?
[00:08:49] Vance Lowe: Now we’re gonna repossess, we’re gonna sell the car and we’re gonna make the bank call, but since your family, if there’s any money left over, it’s yours.
[00:08:59] Seth Hicks Esq.: Yeah, and that’s kind of [00:09:00] like the outside third party type loans and how you make your decisions. Some people are loaning to complete, you know, non-family folks, different businesses, and those have to be collateralized like any banking would.
[00:09:13] Seth Hicks Esq.: But with yourself, you have so much flexibility in this process, in your strategy that you’re at the control. You’re at the, you’re the operating system. Sometimes folks go, well, how repayment schedule, how do I figure this out and how do I structure this? Is that something that, that, that you generally help folks with?
[00:09:30] Seth Hicks Esq.: We teach people that,
[00:09:32] Vance Lowe: yeah, we have a, a system and even software to make this whole strategy quick and easy. You know, I tell people less than 30 minutes a month, you run the whole strategy. It doesn’t even take that long. It’s so easy. And then you know exactly where you are on every loan. So
[00:09:49] Seth Hicks Esq.: we create the, the, uh, promissory notes.
[00:09:52] Seth Hicks Esq.: Mm-hmm. And amortization schedules and repayment, uh, plans that fit within, uh, cash flow and [00:10:00] budget. And really people don’t have to work any harder. They just. Change who they pay. Is that a a true
[00:10:06] Vance Lowe: statement? Exactly. So actually I think a little more friendly. ’cause every month when you get a paycheck, you’re writing checks, putting ’em in mail, putting stamps on ’em, sending ’em off, or you’re doing bill pay or you’re doing something and the money’s leaving.
[00:10:20] Vance Lowe: You’re spending the money, it’s going away from you here. All you’re doing is really moving money to one of your accounts, making the payments back to another account, going on the computer and say, yeah, credit this, credit this, credit this. And you’re done. It’s
[00:10:34] Seth Hicks Esq.: that easy. It’s very simple, and when we lay it out for folks, the light bulbs come on and it demystifies the process for creating these loans and schedules.
[00:10:44] Seth Hicks Esq.: So it comes back to having freedom, the freedom to conduct the loans the way you want to structure them the way you want to within your cash flow and create that security that is just. You don’t have in other places
[00:10:58] Vance Lowe: what people don’t [00:11:00] understand, they think they do because I have a lot of people who, when I ask for assets, I’ve got 401k, I’ve got Ross, I’ve got IRAs, I’ve got stock portfolios, I’ve got this.
[00:11:11] Vance Lowe: And I ask them in those accounts, is your money at work? And they go, yeah, it’s in the count. It’s not folks. See, most of the time what we think is happening, it’s 180 degrees opposite. The money is not working for you. You have to leave the money in the account. Then hope you can get an interest rate or a growth rate.
[00:11:31] Vance Lowe: They’re gonna do it at the littlest they can get away with while using your money and doubling it. On the average every two and a half to five years. What? 4 0 1 ks. What IRAs, what stock portfolios is doubling every two and a half to uh, five years tax free. It’s the person who is working the money and, and everything we’ve set up to this point is you putting the money to work and you getting the volume of return, not [00:12:00] somebody else.
[00:12:00] Vance Lowe: You don’t have to work harder. You’re just smart at what you’re doing and you’re actually working less. You don’t have to worry about really the economy unless it’s affecting your new money coming in under your control. But as far as these loans go. There’s no economy risk, there’s no outside risk of theft or anything.
[00:12:19] Vance Lowe: Right. And it’s in the same places, place on the planet where we store our
[00:12:22] Midroll: money. 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?
[00:12:38] 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 dot private banking strategies dot.
[00:12:54] Seth Hicks Esq.: A thing that we often explain to folks. ’cause they’ll, they’ll go, well, it’s difficult for me to understand [00:13:00] how my policy can continue to grow and increase when I’ve borrowed this policy loan out.
[00:13:08] Seth Hicks Esq.: How can my money be in two places? Let’s drill down a little bit there and, and give people more explanation about the non-direct recognition policy and where the money actually comes from.
[00:13:20] Vance Lowe: Okay, well, the money comes from the. Guarantees of the life insurance company, their structure, their work, when they get premium dollars of a certain amount, they will guaranteed a rate of return.
[00:13:35] Vance Lowe: Typically, that’s around three and a half percent right now. I’ve seen it back in the day when it was seven and 8% fixed, guaranteed interest rates. In Nelson Nash’s book, a lot of his illustrations are based on seven 8% guaranteed rates. But in addition to that, there are profits. To get back to the question, how can my policy grow when [00:14:00] I borrowed money from the policy?
[00:14:02] Vance Lowe: Remember, we don’t borrow our own cash value. We borrow the cash reserves of the life insurance company, so that cash reserve that we borrow is taken out of the investment pool, and so we have to pay an interest on that, but it’s at a preferred rate right now. I think the going rate is 5%. Okay, so that that money comes back into the cash reserve to preserve the profit they’re gonna pay us of usually four or more percent.
[00:14:32] Vance Lowe: So it’s it, it keeps everything honest and going in the right direction. Then if we capitalize. On that loan and do it for profit and put it to work and get a return that Seth has talked about earlier. That profit can be added to the loan payback up to a point. There’s some rules and regulations called modified endowment laws that we have to adhere to, but all of that can go back [00:15:00] into our policy if there’s room to help grow it as well.
[00:15:03] Vance Lowe: If the money’s out working for us. The company goes through its cycle of profits, then those profits are put into our account. They can never be reversed. We always get the guarantee, so that’s always being added to our accounts. So that’s how our policy always continues to grow new premium when that’s paid in generate new cash value, we set up contracts so that in year five it’s like an investment that in year five, every dollar you put in is gonna automatically make a dollar five to a dollar 20 immediately tax free.
[00:15:35] Vance Lowe: And I, I ask how many of those do you want? I always get as many as I can can have because we literally are above a hundred percent. The premium you are putting in is making money immediately, right on the top. Right at the beginning, I put $4,000 in my cash value increases by 5,000. How am I doing? That’s a 20% gain right there.
[00:15:56] Vance Lowe: So people, we design these contracts with [00:16:00] the base part of the premium, which is the engine to go above a hundred percent efficiency for you as soon as possible. And that usually happens in the fifth year. Remember that three to seven year period. Now your premium is making your profit and the policy’s completely free over a period of time.
[00:16:15] Vance Lowe: It takes a while before it breaks even. But if you were to add Seth, if you borrowed money and you bought debt and you got that volume of return, if you added that to it, I took my premium and doubled in four years, what I’d borrowed out.
[00:16:30] Seth Hicks Esq.: So lemme just recap for a second. The premium dollars that we’ve.
[00:16:34] Seth Hicks Esq.: Paid in to capitalize our bank and the cash value in our life insurance contract that we have a guaranteed right to pull out with these contracts. The money doesn’t actually come from our specific policy. It comes from the Life Insurance General Fund where all of their premiums are paid, all of their cash reserves.
[00:16:54] Seth Hicks Esq.: It comes from that pool general fund, correct. Correct. And then so they [00:17:00] effectively, when we’re making those payments back, it goes back into that general fund and they balance a profitability at the end of the year. BA looking at their income from all their sources, and they look at their income, their expenses, the death benefits they’ve paid out, and they’re actually really good.
[00:17:18] Seth Hicks Esq.: That managing those funds, that’s why they can guarantee and pay dividends. And so as we’re paying those policy loans back with interest, they’ve got more capital to be profitable with and pay higher dividends, is that correct?
[00:17:33] Vance Lowe: Correct. Let me make a little bit of a, a disclaimer here. When I say our fifth year premiums and on make us money.
[00:17:41] Vance Lowe: We have paid premium those first four years, both in what we call a paid up addition rider, maybe a term rider, and the base premium and all that comes into play. That 3% guarantee plus the profits all come into play. And so it’s more like when you pay. Fifth year [00:18:00] premiums and on, it’s like getting a dollar five to a dollar 20 on that premium because the cash value increases.
[00:18:07] Vance Lowe: It just, it’s ever increasing until late in in life. It will come back closer to a hundred percent, but it’ll get up to 150% based on a new premium. That’s all why we always design our contracts. People can pay a premium every year. Do they have to continue that? No, they all, they can. Stop paying premium and then they couldn’t add any new premium after they stopped.
[00:18:30] Vance Lowe: But yeah, they’re just totally flexible.
[00:18:32] Seth Hicks Esq.: Right. And like we’ve talked about, there’s really no business or investment where you can put in a dollar and get a dollar 20 in cash value. You gotta pay the premium to, to get that extra 20%, 30%. And in years 5, 6, 7, the real seasoning in your life insurance journey that.
[00:18:52] Seth Hicks Esq.: Starts to go parabolic year 7, 8, 9, 10. It goes from a kind of a horizontal increasing curve to going straight [00:19:00] up. And that’s one of the great values, and we talk about that in our book, the value of compounding interest and compounding value. And there we illustrate doubling a penny for 30 days and you get up into the millions of dollars, which is a great fun tool to really analyze the benefit of compounding.
[00:19:18] Seth Hicks Esq.: People need to understand when we’re talking about having your money in two places and creating velocity and being able to have your cash value increase while you’ve got it at work in other places. But this begs the this next question, Vance, won’t my policy grow faster and won’t I accumulate more cash value if I don’t take out a policy loan?
[00:19:39] Vance Lowe: No. That question comes from thinking we know something about how money works and it’s honestly, it’s an ignorant question, not to demean anybody, but it shows the fact that we are, are clueless. How money works. If it sits in an account, it can only. Earn interest rate for you while the insurance company makes a ton of [00:20:00] money on your cash value.
[00:20:01] Vance Lowe: So you gotta do the same thing. You’ve got to put it to work. You have to work it, not have someone else do it. Buying debt is the absolute safest, best way for you to do that. I’ll show you. It’s easy because everybody gets these life insurance illustrations, and by the way, I hate illustrations, but we have to use them.
[00:20:22] Vance Lowe: And if you do it exactly that way. Look at the guaranteed portion that’s gonna be there. You, you can know that today, right? What you can’t know is the dividends or the profits because they’re not guaranteed. And that’s just an assumption. So look at the guaranteed rate, and then if I just used the guaranteed rate and I borrowed that money.
[00:20:45] Vance Lowe: Put it back and borrowed it again, put it back, borrowed it again, put it back. I would have to have 2, 3, 4, 10, 15, 20 of those policies to hold all the money that just borrowing from the one policy would provide [00:21:00] for me because of volume of return. So
[00:21:02] Seth Hicks Esq.: that’s why it’s important to have the policies structured right though, so that you can capture.
[00:21:09] Seth Hicks Esq.: What we’re talking about, and not everybody knows how to do that out there. I mean, there’s a lot of people, like you said, Vance, that are pushing different types of things that don’t really accomplish what we’re talking about. I mean, you got people pushing Index universal life and you’ve got, and all these risky types of contracts, which don’t accomplish what we’re talking about.
[00:21:29] Seth Hicks Esq.: And so it’s important to understand the value. The benefit of what we’re describing,
[00:21:35] Vance Lowe: and I just put a a plugin right now, now, is don’t get caught up in these universal lives with these indexes. They show high rates return and they show market rate returns, but we’ve already told you and we can prove it over and over again.
[00:21:50] Vance Lowe: These participating mutual whole life insurance contracts always win. They beat the stock market, so why would we wanna risk. [00:22:00] Our future cash value. This is banking. Banking is yield. Yield is money put in the account that cannot be reversed. Okay? Everything else is exotic and comes with high risk.
[00:22:10] Seth Hicks Esq.: A good illustration is with the use of an automobile.
[00:22:14] Seth Hicks Esq.: We’ve talked about this before and we may have a podcast with even deeper illustration, but someone who goes and buys a $50,000 car cash versus the private banking strategies banker who buys. A $50,000 car through their own bank and they set up a repayment schedule where they’re paying back their bank, that $50,000 plus interest.
[00:22:38] Seth Hicks Esq.: Well, at the end of that car’s life, because we all know we’re gonna have to replace cars, and let’s just say you held onto it for seven years, the person who paid cash has had to build up another cash reserve to go. Purchase a new car because that $50,000 automobile that they bought, it’s probably worth about [00:23:00] 15 now.
[00:23:00] Seth Hicks Esq.: So they’ve gotta have saved up enough cash plus the, the trade-in value of that old car to go purchase a new car. Whereas the private banking strategies banker, they’ve been making cash flow payments back into their bank. And not only do they have that principle. $50,000. They’ve got interest on top of that and let’s call it 65.
[00:23:21] Seth Hicks Esq.: So now they’ve got $65,000 in cash value that is replaced there to go purchase another new vehicle in seven years. Plus, the money that they pulled out has been continuing to grow with, uh, dividend payments from the life insurance company and the guaranteed cash value increases as if they never touched a penny of it.
[00:23:42] Vance Lowe: If you self finance your cars, it’s gonna provide retirement income for you. It’s gonna make you a lot of money. The illustration in his book is a $10,000 automobile, paying it back over time and repeating that process 11 times until a person is 65. That’s [00:24:00] $50,000 tax free income for the rest of the.
[00:24:01] Vance Lowe: Okay. By doing it the other way, it would be $50,000 maybe for four years, and they’d be completely outta money. The other person, $50,000 a years, and they’ll pass on a million half to $3 million to their heirs also. So folks, money needs
[00:24:18] Seth Hicks Esq.: to work for you. I’m just gonna explain to folks who’ve never heard our podcast before where you can find more information about us, and that’s private banking strategies.com, private banking strategies.com.
[00:24:30] Seth Hicks Esq.: And if it’s your first visit to the website, you’ll be offered a book that Vance and I authored called Secrets the Banks Don’t Want You To Know That Will help Red Pill you on certain issues of why. Private banking strategies blows the socks off of traditional banking systems and other types of so-called investment and retirement plan.
[00:24:51] Seth Hicks Esq.: If that book and this podcast resonate with you, you’ll have an opportunity to schedule an exploratory call with Vance. His calendar link is in the emails that we [00:25:00] will be sending to you, and that’s our process for jumping into learning how private banking strategies can work for you. Vance,
[00:25:07] Vance Lowe: you got any
[00:25:08] Seth Hicks Esq.: closing
[00:25:08] Vance Lowe: comments for us?
[00:25:10] Vance Lowe: No, we just want to keep our money working for us, but we wanna always get it back to have that as a takeaway. I think that’d be
[00:25:17] Seth Hicks Esq.: fantastic. Awesome. Well, thanks folks, and we look forward to seeing you on the next podcast. Thank you. Bye-bye.
[00:25:25] Outro: Did that story feel like it was about you? Do you feel you should be making more progress toward your financial goals?
[00:25:33] 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.
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