[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.
[00:00:26] 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.
[00:00:43] Seth Hicks Esq.: Hello, and welcome to Private Banking Strategies podcast with Vance Lowe and Seth Hicks.
[00:00:49] Seth Hicks Esq.: Vance, how are you?
[00:00:50] Vance Lowe: It’s good to be back again. I’m raring to go, talk about, uh, another topic.
[00:00:54] Seth Hicks Esq.: Yeah, we’ve been talking about the 100-year family bank and what [00:01:00] the first 90 days look like, and just building a roadmap in the process for folks so they can see how that it will apply to their families. And we’re in a place where we wanna talk about the activation of the family bank, and drill down on some of that.
[00:01:17] Seth Hicks Esq.: What can you tell us about how to activate your family bank?
[00:01:21] Vance Lowe: Okay. If you’re first joining us, you wanna go back and listen to some of the prior podcasts here to bring you up to date, because we’re just going in a logical order here. The next phase that we need to talk about is this activation, how to actually put the banking equation, making it live, proactive in our lives.
[00:01:43] Vance Lowe: So that’s what we wanna talk about today. We have the policy. It’s been issued now. It’s been funded. We have affirmation on the cash value. It’s already there. It’s all ready to be put to, to work. [00:02:00] So once we have that, we need to initiate our first banking transaction. We’ve probably already been trained on some lending software, loan software.
[00:02:16] Vance Lowe: That happens right in the middle of all this stuff, so that as we purchase debt, as we buy loans, our own or someone else’s, it makes no difference, we need to set that up in our system, be able to track that, and make this ha- go smooth and easy. So the first thing we’re gonna do is we’re gonna look at our plan, our eight-year analysis, and we have a priority of events that will happen, first, second, third, and fourth.
[00:02:46] Vance Lowe: So we’re gonna concentrate on those first one, two, or three. It depends, over on the far column of this eight-year analysis, it will tell you the month that you can execute or you can [00:03:00] purchase that debt. And when we first start up, several of those can be purchased in month one. So Seth When you get that information, when there might be a credit card debt, a car payoff, or another debt that we can pay off in month one, what’s the problem if we procrastinate doing that?
[00:03:24] Seth Hicks Esq.: The cash flow return and the compounding nature of your cash flow.
[00:03:30] Vance Lowe: So let’s say there’s three there that we could purchase, and that cash flow that we’re paying out to someone else, and let’s just use round numbers, totals 1,000 bucks. We’ve got enough in cash value and in our plan through assets that we’re bringing into the banking concept to buy these three debts in month one.
[00:03:53] Vance Lowe: And all three of those loans we have been paying out a total of [00:04:00] $1,000. If we miss and wait till month two, are we able to recover that 1,000 bucks?
[00:04:08] Seth Hicks Esq.: No. We’ve lost that.
[00:04:09] Vance Lowe: We’ve lost it. So folks, you don’t wanna do that. You’re not Rockefellers. Every single penny counts. If banks are not willing to let their excess money sit in their vaults overnight with overnight lending just to earn basis points, fractions of 1% overnight on their excess money, you don’t wanna be wasting money either.
[00:04:32] Vance Lowe: That’s $1,000 worth of inflow. Do not make the mistake of thinking that’s $1,000. It’s actually double. If I pay out $1,000, I lose out of my hoppers and my control $1,000. But if I’m able to make that payment, and that payment is made to me, I’m gaining $1,000. That’s a $2,000 spread, right? So I don’t know how to make that more clear, but understand [00:05:00] that it, it’s double.
[00:05:01] Vance Lowe: Now you’ve just added to your hoppers $1,000. This is money for you to reuse. So getting the policy information active, getting everything set up is something we help handle with our clients expressly to get them started. We have regular meetings so that we can purchase this debt, get it set up in the system, and continue to make those payments.
[00:05:29] Vance Lowe: And now the person who’s gonna be receiving the payments will be in our control. And that’s the game of banking, folks. We’ve got to understand who controls the money at the end of the day. We want it out there working for us during the day, but at the end of the day, we want it coming back to us and not someone else.
[00:05:49] Vance Lowe: We never wanna lose control of that money. So as this money comes back, Seth, where is the best place to put that money?
[00:05:57] Seth Hicks Esq.: We’ve learned that life insurance [00:06:00] contracts are the best place to store money for a multitude of reasons, which include the fact that they don’t operate like centralized banks. They have to have one-to-one cash reserves on dollars received, so to speak, in a simple sense.
[00:06:16] Seth Hicks Esq.: And since before our country was a country, through the Civil War, the Great Depression, Great Recession, and every other economic downturn, these life insurance contracts have never failed. So that’s why we call it the safest place to store your cash.
[00:06:34] Vance Lowe: It’s not magic either. And sometimes it’s so simple, people just will disregard it because, oh, it’s not fancy, it’s not complicated, it’s not hard.
[00:06:44] Vance Lowe: First of all, we’re probably going to borrow every penny we can out of our new policy Which now leaves a gap, a hole. We borrowed it out, so we wanna pay it back in. So as that $1,000 in our first example here comes into us, [00:07:00] we wanna put that right back into the policy for us to reuse again. So there is interest But I don’t wanna go into that particularly in this segment.
[00:07:10] Vance Lowe: We have other podcasts that really explain how the policy works, how interest is charged, and how you can work that interest into your favor. I will mention this part. When we borrow money from our life insurance company, these contracts make us owners, so it’s our company along with the other policyholders.
[00:07:32] Vance Lowe: We can’t steal from it. So we’re gonna borrow money, which is the reserve, the cash reserves that they could have lent out. So we’re gonna pay that difference, that wholesale difference in interest charged to us so that we’re guaranteeing a profit for the company that we’re gonna share in. If we pay that back on a regular basis or we use new assets that is out in a stock brokerage account or [00:08:00] someplace else, and let’s say we had available $25,000 of cash value immediately on the start of the policy, we borrow it all out, and we still have $25,000 in another account, we can liquidate that account and immediately move that in, into the policy.
[00:08:18] Vance Lowe: But what I’m really more concerned about is the flow, the cash value. It’s growing. When we borrow money, we have a place to put it back to ’cause we want to flow money. Every time it moves, it creates itself over again, even in our own private system. So premium flow is something else we wanna talk about.
[00:08:38] Vance Lowe: In our process, if we follow the plan, the premium does not become an expense. I don’t know how many times I’ve talked to people who get started and lose ground, won’t continue to learn, and they lose sight of what the premium is. The premium is nothing but capitalization into your business, [00:09:00] capitalization into your bank.
[00:09:01] Vance Lowe: I had a really old client, she’d been with me for more than 20 years, chiropractor, and she never did get how to borrow money and put it, everything. She’d been leaning on us a little bit. She called the other day and said, “Hey, I’m struggling making the payment.” And I said, “Are you trying to pay it out of pocket?”
[00:09:19] Vance Lowe: And she goes, “Yeah, I have to pay it out of the hoppers.” And I’m going, “Something’s wrong because what you’re doing is you’re using money you’re giving away to pay the premiums.” So we wanna make sure that’s always happening and for our clients to stay with us ’cause our job, Seth is dedicated, I’m dedicated to every single person who adopts a strategy that they become experts.
[00:09:43] Vance Lowe: Some of the people don’t want to put the effort in to be an expert. Doing the bare minimums, they may not understand it, they’re just doing the bare minimums, and they lose sight. But those who really capture this strategy into their hearts, into their minds, and switch to this [00:10:00] system, they can’t get enough of it, and the success is amazing.
[00:10:03] Midroll: Did that story feel like it was about you? Do you feel like you are generating a lot of revenue but are not moving forward as fast as you would like? Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get unstuck. Are you ready to take action and get your own private bank?
[00:10:26] Midroll: Please visit us at www.privatebankingstrategies.com.
[00:10:34] Vance Lowe: So we’ve got the premium flow. If it’s correct now, it will just always occur. That premium’s always gonna be there in those offers through the banking equation, and we’re gonna move money into the policy as fast as we can. Our problem is, we can’t move more than what we set up the contract to receive every year.
[00:10:53] Vance Lowe: One more thing I would mention, never make the mistake, unless there’s a critical issue, and I hope we talk about it [00:11:00] first, never switch to a modal premium. What do I mean by modal premium, Seth?
[00:11:05] Seth Hicks Esq.: Paying on a less than annual basis on the premiums.
[00:11:09] Vance Lowe: Okay. Because this is not term, this is permanent, okay?
[00:11:14] Vance Lowe: There’s a cost factor, and it doesn’t matter whether it’s term insurance or whatever else, but the insurance carrier has to pay the people to make those separate connections, billing cycles, recordings, everything else, and that’s somewhere between six and eight percent of the total premium. I’ve got one person now, she’s paying quarterly premium.
[00:11:36] Vance Lowe: Her fee is three hundred and eighty dollars every three months. She said, “What’s this fee for?” It’s the modal premium. You want to go back to annual, and it– you’ve got the money. “I don’t have the money, that’s what-” No, you do have the money. It’s all about how we think. So anyway, assuming we’ve got the premium set up correct, everything’s going fine, and that we’ve corrected any problems that may have [00:12:00] occurred so that we know what we’re doing, the next flow is how are we owning all this stuff?
[00:12:05] Vance Lowe: We’ve talked about that in earlier podcasts. We wanna make sure that the ownership is aligned correctly as w- our bank grows. What we’re gonna find, people start low, and if any of our clients are listening to this thing, we started low, but that’s not where we need to end up. This program is designed, and it’s easy to start duplicating within a year, two years, three years, depending on how much debt, what assets we have available to start going in, and we start multiplying our money warehouse policies, being able to put more and more money in.
[00:12:43] Vance Lowe: If you’ve read Nelson Nash’s book, if you haven’t, we recommend that you do that, he tells us how much our, what, capitalization into our bank should be. It should be exactly the same as you’re doing with your existing bank right now. Right now, you’re putting a hundred percent [00:13:00] of your take-home income into someone else’s bank.
[00:13:02] Vance Lowe: You need to be putting a hundred percent of your take-home into policies in premium. Everybody gets shocked at that because they still think It’s premium. And no, we can’t start there. We’re making a shift, we’re building companies or whatever else, but you wanna get there as fast as you can, ’cause if you knew the system and you knew what this would do for you, you’d move heaven and earth to get there as fast as you possibly can.
[00:13:26] Vance Lowe: Trust me on that. That’s something everybody can discover. So ownership on how we build this up, because pretty soon we’re gonna be into duplicate policies, additional policies, and we’re gonna run into insurable limits, and have to put policies on other people. That’s the beauty of this thing. We don’t have to put policies just on us or spouse or even our children.
[00:13:51] Vance Lowe: We can put them on grandkids, we can put them on anyone that we have an insurable interest on, business partners, employees, whatever else. So [00:14:00] setting this up and doing ownership set up as you go along will be critical, and that’s, Seth, that’s your forte there, to help them out with that. Correct?
[00:14:09] Seth Hicks Esq.: Sure. Let’s talk a little bit about liquidity buffers.
[00:14:13] Seth Hicks Esq.: I think that we’ve had some folks think, “I just gotta take all this money out of my policies and put it somewhere,” or just they don’t make a good banking decision like a banker would in getting the money back. What type of liquidity buffers do you apply and for what types of use in the private bank?
[00:14:34] Vance Lowe: That’s always an issue because you always want to have the buffer. You always want to have money set aside for, number one, emergency, number two, opportunity.
[00:14:46] Seth Hicks Esq.: Would one of those exceptions be if you’re using your private bank to purchase all high interest credit card debt? Would you deploy all of your cash value to do that?
[00:14:57] Seth Hicks Esq.: I think that you would, you not, if you’ve got the cash flow [00:15:00] return?
[00:15:00] Vance Lowe: If you’ve got the cash flow return to build back things back up, absolutely yes. And if you have backup, if you have other assets, if not all assets are committed into the banking at this particular time, you still have assets waiting to come in online, ’cause you- you maxed out the premium that year or whatever else, then you sh- you have a backup.
[00:15:24] Vance Lowe: This is where we also really encourage people with home equity lines of credit to be able to have access to your principal immediately without having to go through a 90-day plus process to access your own money. So liquidity will always be an issue. Again, that’s something that can easily be bounced off us to talk about, what limit should I have?
[00:15:49] Vance Lowe: So yeah, Seth, I think setting that liquidity buffer and knowing what’s coming in, and you can tell on your eight-year analysis, your mo- your monthly plan, [00:16:00] that flow that should be coming in from work From payments captured, from what we call the 10% law, and the extra that we haven’t spent that month is all liquidity controlled by your bank.
[00:16:15] Vance Lowe: And a lot of times that’s significant because, again, when we first start this stuff out, we start pretty low. We have this excess money, and it would be a, a sad mistake if we think, “Oh, I have this excess money, so I can go spend it.” No, don’t do that. Banks don’t spend money. People don’t spend their money.
[00:16:34] Vance Lowe: They put it to work and get it back. So put it in the bank, put it to work, one way or another.
[00:16:40] Seth Hicks Esq.: When that light bulb turns on for folks, it really makes a difference in, in how they view money and how they can put it to work for themselves. And like you said, it’s almost contagious in trying to figure out how to capture everything within your control and keep it within the life [00:17:00] insurance contract economy.
[00:17:02] Vance Lowe: So one more thing I would throw into this thing, we need to establish policy loan access. Folks, it’s not like a real bank. We teach people what’s called the 90-day rule. We try to liquidate actual banking accounts and move it into our policies under what’s called a 90-day rule. And if you wanna know more about that, look at our other podcasts or whatever else.
[00:17:27] Vance Lowe: It keeps us from making the insurance carrier redo the loan too often, because if they do that, they have the option of stopping that, making you, “No, you don’t have that liquid of access anymore. We’re gonna limit you to two loans a year.” We’ve never had that happen because all of our clients adhere to that 90-day rule.
[00:17:52] Seth Hicks Esq.: Folks, if this content is resonating with you and if you wanna learn more, go to our website at privatebankingstrategies.com. [00:18:00] It’s privatebankingstrategies.com, and you’ll find over 160 podcasts and robust b- blog articles on how this can work for you. And if, when you, you’ll also have the opportunity to put your name and email in and read a book that Vance and I authored called Secrets the Banks Don’t Want You to Know, and that’ll become immediately available to you in audio or PDF version.
[00:18:26] Seth Hicks Esq.: So if you wanna listen to it on the go, you can, or you can read it. But that’s going to help you understand the value of life insurance contract banking, compounding interest, why centralized banks are not a safe place to store wealth. And a lot of people in our audience already understand those concepts.
[00:18:47] Seth Hicks Esq.: Some don’t. So it, it’s often has been a red pill type of book for folks in educating them on things that they thought were safe practices. Vance, any other thoughts or [00:19:00] closing remarks?
[00:19:01] Vance Lowe: No, I just really enjoy the simplicity of this strategy. It is something that people have to be disciplined about doing.
[00:19:10] Vance Lowe: Recommend that you take the next step and find out enough to decide whether you want this in your life or not.
[00:19:16] Seth Hicks Esq.: Thanks for joining us today, folks. We look forward to seeing you on the next one. Bye for now.
[00:19:21] Outro: Bye-bye. Did that story feel like it was about you? Do you feel you should be making more progress toward your financial goals?
[00:19:30] 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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