[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, welcome to Private Banking Strategies, with Vance Lowe and Seth Hicks.
[00:00:41] Seth Hicks Esq.: Vance, how are you?
[00:00:42] Vance Lowe: I’m doing great. Anxious to get back into this family we’ve been talking about.
[00:00:48] Seth Hicks Esq.: Okay, we’ve been doing a case study on the Rivera family and we just touched the surface on their policy structure and talking through how we architecture the plan for a family like the [00:01:00] Rivera’s. And just to recap the Rivera’s, our married couple in their forties, they’ve got three kids, 15 to five.
[00:01:06] Seth Hicks Esq.: They have a healthy earning, double earning income household with 1300 $65,000 a year. So that’s kind of our hypothetical framework here for in this case study. You want to start digging into the structure?
[00:01:20] Vance Lowe: Yeah. This family’s pretty sold on the banking strategy. They’ve done a lot of homework. What they wanna do is build a foundation and a whole structure of how they wanna proceed for the rest of their life.
[00:01:34] Vance Lowe: They know that it’s long-term strategy, 5, 10, 20 years into the future before things really culminize into independence. So let’s just break down some of the areas of their concern. One of the things that are important. On their list was policies. It’s sometimes confusing. I know it was for me when I first started out.
[00:01:58] Vance Lowe: Why do I need more [00:02:00] than one policy? Why should I have. Multiple policies, so we have kind of a criteria of order of importance. Seth, you can kind of dissect that a little bit. Who should the first policies be on and why? And you know, why do you add additional policies? That type of thing.
[00:02:19] Seth Hicks Esq.: Well, building the family bank is not a single policy.
[00:02:22] Seth Hicks Esq.: It is a series of structured policies across family members that reciprocate and cross capitalize and are for the larger benefit of the entire family. So generally, the cornerstones of the structure are with the patriarch and the matriarch, the mother and the father, who will soon enough become grandparents.
[00:02:46] Seth Hicks Esq.: And perhaps even become great grandparents. If they start early enough in this process and have the right ages of their kids, the primary policies will go on, mother and father. And then there will also be policies [00:03:00] on the children, appropriate amounts because children have very high death benefit and their insurance and insurability is quickly.
[00:03:11] Seth Hicks Esq.: Used up because insurance companies won’t insure someone without a ceiling. It’s tied to how much they’re worth and how old they are, and various other actuarial standards. So parent policies and children policies. Those are the first two layers.
[00:03:26] Vance Lowe: The structure and philosophy works best in a hundred year plan.
[00:03:32] Vance Lowe: The parents should be first, and they should have the policies on them depending on the age of the children and the goals. Sometimes policies are started immediately. Sometimes they’re started a little bit later, but we want policies on the kids because. Of the size and the bank that they’re after. Most people like this family here have well-paying jobs.
[00:03:59] Vance Lowe: They’re [00:04:00] making well over a quarter million dollars take home per year, and there’s a lot of money passing through their hand. And the secret of success is how much of that money that is actually passing through their hands, can they keep, can they put to work? That’s the purpose of the number of policies will be dictated on how well they can manipulate their lifestyle and their banking strategy to accumulate more and more and more wealth.
[00:04:28] Vance Lowe: So there’s another way, folks, I think on a high level to think of these policies. These policies are contracts. They are built to create and hold cash assets. They’re there to be used like a money warehouse. That’s a good scenario that I like to use. These policies are many warehouse where you’re stacking money on the shelves to be used to finance and purchase things throughout your lifetime.
[00:04:56] Vance Lowe: The more wealth that you accumulate, the more you can get into [00:05:00] these contracts, the more private you’re gonna be, the safer your assets are going to be, because these contracts are literally the safest thing you can do on this planet and throughout history. To date, they’re secure. They’re guaranteed to grow.
[00:05:18] Vance Lowe: Nothing is guaranteed if the world ends, but that’s the extreme, right? There’s just not a safer place that you can put money and still have it beat inflation and probably the stock market too. That’s the purpose of the policy. Seth, I think definitely on the parents first, because the kids can’t even qualify for insurance if the parents don’t have, you know, a death benefit insurance on them.
[00:05:41] Vance Lowe: The rule of thumb, if people are doing this and thinking about it, kids can only qualify for half of what’s on the parents. Now. There’s ways to do whatever we need to do. We’ve got a lot of sophistication. We understand life insurance, contract law very well, and know how to go [00:06:00] about issuing contracts to meet people’s needs.
[00:06:03] Vance Lowe: The reason for the policies. The order of the policies should probably be patriarchs down to the smallest child,
[00:06:12] Seth Hicks Esq.: right? The children, like you said, they’re gonna be lower premium amounts and higher death benefits, obviously, and over longer terms tend. 20, 30, 40, 50 years, the compounding growth is literally parabolic and it does double every, almost every year after a certain term, let’s say 30, 40 years.
[00:06:32] Seth Hicks Esq.: And the illustrations show the doubling of the parabolic growth like in the Twin Sisters podcast that we do, and also in the Paul Bunion podcast that we do that show Nelson’s nephew. His timber and lumber financing and how those illustrations likewise show that as the time continuum increases, the growth goes almost straight up.
[00:06:57] Seth Hicks Esq.: So year after year,
[00:06:59] Vance Lowe: if you can get [00:07:00] your mind around it exponential compounding, you know, let’s just use a five year timeframe, which is pretty average for, for things we do here. It doubles every five years. Pretty soon that doubling is massive. You get a million dollars, you know, you take 20 years to accumulate a million dollars, you know, in doubling, and in the next five years it goes to 2 million, and in the next five years it goes to 4 million.
[00:07:25] Vance Lowe: It’s parabolic, it just massive. Growth out there. So the sooner you start and put money to work for you, put the banking equation in. You’re always going to be looking and solving the problem of creating additional contracts, additional policies to hold your wealth.
[00:07:41] Seth Hicks Esq.: Right, and one of the first deployments of, let’s say, your capital that’s in your bank, we always explain to people that should be bad debt, high interest rate debt.
[00:07:53] Seth Hicks Esq.: If you have high interest rate debt, then you can use a hundred percent of your cash value to take out that [00:08:00] bad debt and begin to recapture all the payments that you were making on high interest financing. Whether it’s. Credit card, automobiles, homes, whatever the asset may be, you can transfer that interest payment back into your bank when you have the capital to deploy.
[00:08:16] Seth Hicks Esq.: So bad debt’s the first place. What’s some of the other places after you’ve got all the debt purchased in your life and business?
[00:08:24] Vance Lowe: That reminds me of something that I think is important to say. We’re programmed about insurance from as far back as we can think, insurance is an expense. What we have to do is a mind shifting, altering view.
[00:08:40] Vance Lowe: On these contracts, the premium is still called premium, but it is not an expense. It’s an ancillary event. It’s a thought, oh, I’m accumulating to pay my property taxes. In these strategies, folks, we can use money that we’re accumulating for other things. When the premium time comes to [00:09:00] capitalize, oh, here’s an open window.
[00:09:02] Vance Lowe: The premium is nothing more than an open window. To put a maximum amount that we’ve agreed upon into this contract to be reused. So if I’ve got a $50,000 premium and I’m saving for other things, I’ve accumulated a lot of different things. That window opens up instead of holding it at a bank or in other assets, I can liquidate that.
[00:09:27] Vance Lowe: I can put it in as premium into my policy and immediately, depending on which year we’re in access, anywhere from 60. To over a hundred percent of what we’re putting in. So please understand that it is not expense. We build these contracts to make sure that it is long term and never expense. Yes, their startup delays before we have access to a hundred percent, but it in year five, the amount of money that we put in creates over a hundred percent.
[00:09:59] Vance Lowe: Cash [00:10:00] value available immediately. So for instance, if I put in $50,000 in year five, then my cash value grows thousand dollar gain. It doesn’t take very long to make up that 40%. We weren’t able to get two in year one, or you know, two or three. So. I think that’s an important avenue. So as we build these contracts, we want to put the money to work.
[00:10:26] Vance Lowe: We want to put our income through our system. We set up a bank, be able to get our money back. We show people how to get back a hundred percent of their monthly expenses so they can use that, and then they purchase the things they need through loans in essence. So where do we accumulate that? When I first started, I had $10,000 a month worth of outflowing debt every month.
[00:10:52] Vance Lowe: Wrote up all the bills. It came to about $10,000 a month. Well, I had enough assets that I could go buy the [00:11:00] debt, and that’s exactly what I did. And I turned $10,000 of. Outflow into $10,000 of inflow over that first six months. People think, wow, you know, that’s a $10,000 advantage. No, folks, that’s a $20,000 advantage from depletion to increase.
[00:11:18] Vance Lowe: So we call that windfall, and the policies have everything to do with where are you going to store the money, where are the assets going to be held? And then there’s a myriad of thought that goes into that, Seth, besides the cash assets and owning and financing your own debt, we mentioned it a lot in different podcasts.
[00:11:39] Vance Lowe: We have hard assets. We can begin to purchase hard assets that will give us a pretty big profit in the future. We can set up avenues like I did. Before, I did a lot of policies on grandkids. I did a laddering strategy, which created a lot of debt in the policies over a 10 year period [00:12:00] of time, a lot of debt, which was on purpose so that when I sold and liquidated real estate, I had a place to put my profits immediately.
[00:12:09] Vance Lowe: As we consider the policies, and we consider this case study in their minds, they wanted to know. How many policies should I get? How many should I start up? Who should they be on first and so forth, and how do we move forward? So I think, you know, I’ve given you a little bit of high level look on how we would address that depending on an individual’s goals and needs so that their banks will always be adequate.
[00:12:44] Vance Lowe: And they’ll know when they’re too small and they have to add new accounts.
[00:12:50] Seth Hicks Esq.: Well, we’ve talked about how they deployed their capital and their private bank to take out the bad debt or high interest debt, and they were paying [00:13:00] $4,800 a month in payment. And so when you say, I’m gonna purchase the debt in my life, and I had $10,000 in bills, you’re effectively.
[00:13:10] Seth Hicks Esq.: Choosing to finance, not through credit cards, not through auto financing companies, not through business loans, hard money loans, personal loans. You then shift your understanding and your focus to be your own bank and finance those opportunities yourself. And if your bank is not seasoned or if you don’t capitalize it with hundreds of thousands of dollars, you may be limited initially in what you can.
[00:13:39] Seth Hicks Esq.: Refinance. And so that’s where you’re describing that is refinancing credit card and bad debt.
[00:13:46] 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 [00:14:00] your financial goals?
[00:14:01] 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.
[00:14:17] Vance Lowe: Let’s give a good example this. This comes across our desk all the time, and this family’s facing it too. They have some high interest debts, normally credit card debt.
[00:14:27] Vance Lowe: Sometimes we’re out, you know, kind of going and you know, we come home and the furnace goes out or some major medical or whatever we have to charge on a credit card, and that gives us a little bit of time. Credit cards are absolutely fantastic if used correctly, doesn’t matter what the interest rate is, but sometimes we run out of.
[00:14:48] Vance Lowe: Places to go get money and for instance, all of a sudden I’ve got a 20 to $40,000 credit card debt and I can’t pay that off at [00:15:00] one time. And the average credit card debt these days, 25 to 30% interest. That’s high credit card debt. Well, what do we do? We take a look. We may have a stock portfolio. We may have Ross out there.
[00:15:15] Vance Lowe: We may have other assets that are in accounts that we think are working for us, when in fact they’re not. And that’s a big discovery in itself. But we could take the money in our policies, we could take other assets that we could get ahold of. We could incorporate that into our banking strategy and purchase that debt versus paying it off.
[00:15:44] Vance Lowe: Seth, what’s the difference between purchasing a debt and paying it off?
[00:15:50] Seth Hicks Esq.: Paying it off, you’re not building a cash flow back into your banking system where if you just pay the credit card off and you don’t pay yourself and your own [00:16:00] capitalization in your bank that you use to purchase the credit card debt.
[00:16:04] Seth Hicks Esq.: So that’s what Nelson calls stealing the piece in his book.
[00:16:10] Vance Lowe: Exactly. So the difference is you’re gonna. Give away principle. If you pay it off, that principle then is worthless to you and is gone forever. If you purchase it like a bank would, a bank lends money. It never gives money away. So if we purchase that debt, we set up a repayment schedule.
[00:16:29] Vance Lowe: Now we put our money, our principle to work, it’s gonna pull interest and profit back to us, and we get to reuse it again. Over and over again. That’s what’s not in people’s lives. This family realized that this money was burning through their control and they were losing it out the backside, always having to generate new money.
[00:16:49] Vance Lowe: And through this process and these policies, we store up money where through both emergency and opportunity, we have a use of [00:17:00] money to finance self-finance things. I guess we should reiterate here that this whole philosophy of us using money, accumulating it, going through the strategy is that we finance every single thing we purchase throughout life.
[00:17:16] Vance Lowe: It’s important to understand, even though our mentors that paying cash is the best way to get through life. It’s probably one of the least expensive, but it’s not that either. When we pay cash for something, we give up control of that money that would’ve earned us a return for the rest of our lives. So if you start thinking doubling every five years, that thing you paid cash for is gonna cost you 10 to a hundred times more by giving up the principle versus keeping it and self-financing the key.
[00:17:52] Vance Lowe: Success is that you’re self financing instead of having someone else finance it for you because now you are worse [00:18:00] off, you become a slave to the system, to the owner of the loan. So this is freedom, but we still self-finance. And that gets back to you’re stilling the piece, Seth,
[00:18:10] Seth Hicks Esq.: right? You have to create a loan structure back to your own family bank that creates cash flow.
[00:18:18] Seth Hicks Esq.: Cash flow that’s generated. Either from the money that you already make and living within your means, or it comes from sell of the business, sell of real estate, other investment income. If you don’t have those asset classes, one of the best investments that people can make using. Private banking strategies is into real estate, cash flowing, real estate investment, real estate, whether that’s duplexes, quadraplexes, apartment buildings, self storage, mobile home parks.
[00:18:55] Seth Hicks Esq.: There, the variations are quite. Abroad and we’ve had clients [00:19:00] invest in every real estate class I have, and so that’s what the Rivera’s did next. After they purchased all their bad debt, they didn’t have any credit card debt or bad business financing or even SBA loans. They had captured all of that into their private family bank.
[00:19:16] Seth Hicks Esq.: They were making payments on all the loans that they structured. Within their means, and they still had cash left over to deploy for new opportunities. Well, one of the opportunities that fit their family, their knowledge base, was real estate. So they started with duplexes and with those duplexes, they used their free, free capital in their bank.
[00:19:38] Seth Hicks Esq.: To make down payments on duplexes and use third party financing to acquire multiple duplexes. And what that did was multiply their cash flow from like one duplex to multiple duplexes, and you’re getting, let’s say, a thousand dollars a door that goes from getting $2,000 a door to maybe four or six or [00:20:00] $8,000 a month.
[00:20:01] Seth Hicks Esq.: Per door and it allows you to accelerate the repayment of your third party lenders. Because we didn’t pay full cash out of our banking system, we leveraged with healthy leverage. What would healthy leverage be in this context, Vance? I mean, what do you see as healthy leverage on in this situation? We already talked about bad debt.
[00:20:23] Seth Hicks Esq.: You could use a hundred percent. Of your cash value to take out bad debt so long as you’re structuring your repayments properly. Well, what about when we go into real estate?
[00:20:32] Vance Lowe: The key is capitalization. You’ve gotta capitalize, you’ve gotta put money in your system so it’s available when number one, emergencies happen.
[00:20:42] Vance Lowe: Number two, opportunities happen. So let’s say, you know, we’ve. Paid our debt. We now have monthly expenses, monthly payments coming into our bank. Instead of going away from it, accumulating more money every single month, we can put it back in the shelves until [00:21:00] an opportunity comes along. Let’s say a person got into trouble.
[00:21:04] Vance Lowe: He owns two duplexes. He’s tired of them, wants to get rid of them, and he needs cash and he needs someone to take it completely over. Well, there’s an opportunity right there to put and employ some of our money from the policies into that. How much we wanna do, depending on the circumstances. You run the numbers.
[00:21:23] Vance Lowe: Do we want to pay out the equity? Do we want to purchase, try to finance the whole thing. We may not have the whole thing, so we leverage, we put. The down payment’s down. I love it when an individual comes in and they’re in a groundbreaking situation and four or five properties are being developed, the prices are right, and someone takes a hundred thousand dollars and puts $20,000 on five different units.
[00:21:50] Vance Lowe: So they borrow the a hundred thousand dollars from their policies. The banks give full credit for the down payment into all the properties, and we’ve designed it so that the cash flow [00:22:00] from each of the properties will pay the mortgages plus the a hundred thousand dollars back into the hoppers. And then you use your tax deductions and depletion, and within 10 years, you own all five of those properties outright with the mortgage payments coming to you instead of some other bank.
[00:22:17] Seth Hicks Esq.: And so that’s how the Rivera plan worked for them and the cash flow from the rentals. They repaid their policy loans they had constantly with each repayment that actually capitalizes your bank with free available cash to redeploy maybe an an additional rental. And that’s how they built up 24 rental doors at a 10 year mark with that consistent cash flow.
[00:22:39] Seth Hicks Esq.: They implemented the plan. They really didn’t work any harder. They didn’t go out and double their take home income. They did through investment and repayment of their bank, but they didn’t go working harder and take on double jobs and, and take on risk. That was unnecessary. That created the consistent cash flow and fed all the policies, not just of the mother [00:23:00] and the father, but also three children, and that took them into a place where they were worth $12.4 million in the 20 year mark 18 active policies.
[00:23:11] Vance Lowe: You see, Seth, what we want to try to get to everybody is, there’s something we’re talking about here, overlying everything, and this is how money works. It’s all about how you efficiently make things happen. Maybe an hour, maybe a half an hour a month to implement this strategy, to make all this happen, to make all this work.
[00:23:34] Vance Lowe: That’s all it took. But what they did is to make sure they understood the flow of money where money is being made for them instead of someone else. We always rely on the stock market, mutual funds. Everybody thinks that 4 0 1 Ks and Ross are the right things to do. Everything I’ve just mentioned here is not only not [00:24:00] right, it’s probably the worst possible thing you can do with what you have available.
[00:24:05] Vance Lowe: It’s the end results. It’s the lazy man and the failure route. It won’t stay paced with inflation. It’s proven that it never has. And getting the funds to work for you is how we’re talking about doing it, building equity, leveraging it, putting it to work where we know we have positive cash flows, we’re the ones getting the money, we’re the ones working it.
[00:24:27] Vance Lowe: We’re the ones realizing the growth. So there’s so much more that you know, we can discuss about this family that we’ll get into. But I think the overlying thing we wanna get across is that it’s going to take a series of contract. And like I said at the beginning, I struggled with that and my mentor was absolutely ruthless with me saying I hadn’t read the material I that needed to because of the question that I asked.
[00:24:53] Vance Lowe: Not very long after that meeting I discovered why. You’re gonna need more policies. And [00:25:00] it’s not somebody trying to get you to get more contracts, it’s you expanding your bank as you go. So it will hold the, uh, capitalization,
[00:25:09] Seth Hicks Esq.: right. Well, whether it’s real estate or some other business opportunity, the opportunities will fit the family, will fit the people’s knowledge base.
[00:25:19] Seth Hicks Esq.: And what do I mean by that? Well take a look at our Paul Bunion podcast. That’s Nelson Nash’s nephew. Who was a lumber and timber guy. He didn’t go out and buy investment real estate. What he did was finance his own timber equipment, heavy equipment that was tens of thousands and hundreds of thousands of dollars per piece.
[00:25:39] Seth Hicks Esq.: And then when he began to operate that bank for four or five years, he realized I can finance all of the other. Timber folks and make banking my business instead of timber. And that’s what he did. So if you’re in the laundromat business or if you’re in the car dealership business, or if you’re in the landscaping business, the principles are [00:26:00] still the same.
[00:26:01] Vance Lowe: It really is. So do yourself a favor. Find out more about how Money Works. Watch these podcasts that we’ve got. It’s important to maybe take these. Case studies and plug yourself into the parts that trigger you and live that and see how that would solve out for yourself.
[00:26:22] Seth Hicks Esq.: If the numbers are not appropriate for your situation, maybe they’re too small, maybe they’re too big.
[00:26:29] Seth Hicks Esq.: This strategies and using life insurance contracts to bank with properly structured policies is there’s no other type of product or system or structure that will leave you in 30 years. This one leaves you with such success and we’ve seen people chase it. You know, other opportunities, chase markets, chase various things and risk and speculative, but we’ve never had a family that exercises these plans go, I wish I would’ve done less or I [00:27:00] wish I wouldn’t have done that.
[00:27:01] Seth Hicks Esq.: Wouldn’t have done private banking. Nobody, never.
[00:27:04] Vance Lowe: Right. That’s so true.
[00:27:06] Seth Hicks Esq.: Folks, if this content is resonating with you, and if you wanna learn more about how to create a hundred year private family bank, or even just implement banking in your life and grow from there, check out our website@privatebankingstrategies.com.
[00:27:20] Seth Hicks Esq.: There. We’ve got a free book for you, and it’s something that Vance and I developed. Entitled Secrets that the Banks Don’t Want you to know, and we incorporate many different concepts that will red pill you. We like to say on banking, procedures, equations that affect you and why most importantly, you should take the banking equation back in your.
[00:27:44] Seth Hicks Esq.: That book is free to our listeners and audience who’s made it this far in our podcast, thank you for staying with us. Joining us. Put your name and your email in on our website, and you’ll get emails from us that are announcing our podcast and announcing things that we bring value [00:28:00] to you, our audience with.
[00:28:01] Seth Hicks Esq.: But most importantly, if you want to schedule a call and take a test run and see how this will apply. To you and your family. You’re gonna have the chance to do that on an exploratory call with Vance. His calendar link is in the emails only for folks like you. So if it resonates with you, you like what you’re hearing, and you’ve listened to our podcast and read our blogs, and you wanna learn more, schedule that exploratory call with Vance and learn how it can work for your family.
[00:28:28] Seth Hicks Esq.: Vance, any closing remarks today?
[00:28:31] Vance Lowe: We really do encourage you to do that. We’ll even set you up to actually take this strategy for a test drive with your own numbers so that you can see if this is something that will make you better off. We encourage you do that ’cause we know you’ll get positive results from
[00:28:49] Seth Hicks Esq.: it.
[00:28:49] Seth Hicks Esq.: Thanks for joining us folks. Until next time, we’ll see you.
[00:28:52] Vance Lowe: Thank you very much.
[00:28:54] Outro: Did that story feel like it was about you? Do you feel you should be making more [00:29:00] 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?
[00:29:10] Outro: Please visit us at www.privatebankingstrategies.com.
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