[00:00:00] Voice Over: Welcome to private banking strategies podcast with Vance lo and Seth hits 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 for. Tax-free fortress for their families, learn how to keep what you wear 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 take total control of your financial security now onto the show.
[00:00:39] Aric Johnson: Hello and welcome to private banking strategies with Vance Lowe and Seth Hicks. Vance and Seth, how are you today?
[00:00:45] Vance Lowe: Were absolutely
[00:00:46] Aric Johnson: wonderful. I’m not.
I’m not doing great. So here’s the thing is I’ve been thinking about something that you guys said on the last podcast and for the listeners that are just joining us. The last podcast leads into this one. [00:01:00] We’ll, we’ll talk about that in a moment, but you guys quoted congressmen or somebody, a representative from Texas, and it’s been kind of eating at me and the thing, and I’m just going to kind of paraphrase it.
I think. They said IRAs or Roth IRAs or those types of plans are not wealth, succession management tools. And here’s the thing that’s bothering me about that. If it’s my Roth IRA or if it’s my IRS. Can I do with it? What I please? How, how can somebody else tell me that, that isn’t a success wealth succession management tool.
I want to pass stuff to my children. I we’ve talked about my grandchildren on this before you and I, you know, we, we’ve all talked about our kids and family. If I want to do something with my IRA. Who’s who is this person to tell me that that’s not what it’s for? And I know that you guys have kind of talked about why it’s not mine necessarily.
And that’s what that last show was about, but that’s been bothering me ever since you said. [00:02:00]
[00:02:01] Seth Hicks: Well, it’s a great, great point, Eric. And I think that’s, that’s the whole point that I wanted to make and bringing up that congressman’s quote is that it, it should slap people in the face and especially if you’ve got a 401k or an IRA.
Or qualified plan and it, because it definitely, it’s a, it’s an amazing tale at the poker table. He’s telling you exactly what we were trying to communicate in the last episode. Congress is coming after your retirement money and they’re trying to do it. Like you mentioned like a snake eating something from, from the back legs forward so that you don’t really know what’s going on.
And, and we’re trying to ring a bell that causes people to stop and think. It should shock you. And the fact is, is that, yeah, it’s, it’s not your money. As Vance pointed out, it’s, it’s an, a government retirement account of what you participate and they can change the [00:03:00] rules and change the taxation, such that you have less and less control, less and less use, and your heirs get less and less, or perhaps nothing in the future.
And it wouldn’t surprise me if that’s where they get. Yeah,
[00:03:17] Vance Lowe: Vance. Okay guys. Yeah. We’re going to, I want to change the mood here. We can tell me, we’re going to talk about the light at the end of the tunnel. Seth has mentioned many times is that folks, the good news is you don’t have to play in that sandbox.
You have your own sandbox. And so I want to go back in history and I want us to understand what made America so strong. So fast. You know, a hundred years, America literally went from nothing to the most powerful nation on this planet, through history. And how did they do that? [00:04:00] Start looking at your history.
What’s I think absolutely a critical and a mentor of mine. Uh, Nelson Nash told me and warned us all so much about how important history is to. And not to let our government change our history to suit their satisfaction. Indeed, we literally went to war over a what was it? A 2 cent or 3 cent tax increase on tea.
Remember the Boston tea party triggered the first fight. A very powerful, powerful nation. England was completely got their butts kicked. By the Americans who were over there, cause they were very passionate. Americans were known for their independency. They were completely independent. They were a melting pot, welcomed many other people throughout the world to migrate there because it was a blur.
Land, I think, and I [00:05:00] believe that that was a more prosperous land than, than any place on the planet. And they became independent. But picture this folks, these families with kids and everything else would go out into the wilderness, hundreds of miles from civilization and they would live and they would survive.
Well, they needed banking back then. Okay. And banking. Wasn’t like, we know it today by. The life insurance companies provided the banking equation in the first hundred years of our existence. And people would put their money with the insurance companies and they would do their own self financing so that they could put the money back.
And the interest that they charged themselves would be credited to them as well. So they had an ever spiraling increase of money. And this is how the average person did that. Along with [00:06:00] education and their schools, they taught themselves their families. And when little towns started coming up and there was little community schools, they taught how money works.
They taught how to stretch a dollar, how to get several uses out of a dollar and became fiercely independent. One of the reasons they taught in schools so that their children would be armed with the same information they had and they could pass on a legacy or this independent way of life onto their children.
They could be successful as well. Not only survive in the wilderness, but accomplish the things they wanted to do. Because there was no government control. There was no outside interference. They wanted to have that independence. That’s why they went out in the wilderness. That that’s why they created all the land that they [00:07:00] did or bought the land so that they could have their own world, their own life.
Yeah. Let’s talk about how we do that. Maybe how, how it was lost or how we set that up Seth. We got kind of an outline here, so let’s get into.
[00:07:18] Seth Hicks: Sure. Well, we’re focusing on the seventh pillar of private banking strategies, legacy value, and creating generational wealth that transfers tax-free to your heirs.
And just like Vance was illustrating and a pioneering. Frontier of American society. That was one of the fundamental motivations for creating generational wealth was, was keeping it in the family and maintaining what you had the wealth stored up in a family banking system and a private banking strategy and the death benefits paid on the life insurance policies inside that family bank they’re transferred tax free to the heirs.
Eric, unlike a qualified government [00:08:00] plan. There’s no government true. And there’s, there’s a completely financially private transaction. Now I’m going to tell you a couple stories about how not to do it. Okay. Okay. Everybody should know of a. Artist, formerly known as Prince. He was a, a music artist and he died within the last four or five years.
And his estate was worth just over $200 million and he had no private banking strategy. Really didn’t even have a proper. Plan for any type of generational wealth transfer, he’s lost over a hundred million dollars and the transfer to his heirs. So of a $200 million state, more than half was lost in taxation to the federal government and to the state of Minnesota.
Think of that. If you worked your entire life and whatever, you’ve amassed, having it. And half for your children and [00:09:00] those whom you love it, it should slap you in the face. Just like the Senator or rather the congressman’s comments about IRAs are not well succession tools. Yeah, of course they are. They should be.
And that’s what people think they are. And that’s why it shocks the conscious. There’s another person that most people consider a financial advisor, whom I say that with tongue in cheek named Susie Orman, she’s really more of a marketing person than a financial, uh, genius. Although she’s given credit for that.
Reported in a New York times article where an interviewer is asking her questions about wealth, succession and wealth transfer. And she’s fearful about her, what she anticipates a $60 million estate. Being cut in half for her heirs. And she doesn’t know what to do. She’s puzzled because she doesn’t want 30 million or $40 million of the [00:10:00] wealth that she’s accumulated falling into government hands that are notorious for pork belly spending and it going away.
She wants it to be kept in her family and rightfully so, just like pioneering Americans, just like you do Eric. And just like I do just like Vance does well, the solution is quite simple actually. And it’s. Creating a private banking strategy and a system whereby you don’t have to play in their sandbox.
You can create a multi-generational wealth succession plan without any government intrusion. Tax-free that’s under your complete control and financially private. That is what we’re focusing on today. Legacy value for multi-generational wealth.
[00:10:44] Aric Johnson: Yeah. And so I want to say one thing real quick, because. A lot of what you guys talk about is, is trying to take the control out of the government’s hands and put it back into your hands.
And that rings so true with, I mean, it should ring true for everybody listening to this podcast. [00:11:00] But when you talked about prince, one thing that a lot of people don’t know is that he had a vault with a lot of his music in it that he’s never released. He was constantly. Creating music. The man was a genius when it came to music, quite honestly, uh, he had his entire house wired with microphones and was constantly recording something all the time.
So he has this vault and the government is now going to try, and this is what kicks me. They’re the ones trying to figure out what the value of that is. So they can tax that it’s unreleased music. It’s unrelated. A lot of things, but now they even still want to dip into that. So when you say that he lost over a hundred million dollars or his heirs lost over a hundred million dollars, it’s even beyond that because they haven’t been able to come up with a value of what that kind of thing is worth.
That’s the kind of control that the government really wants. They want to be able to say how much something is worth so they can tax it to their heart’s delight and content. They get their, their dollar and it, they may not have the [00:12:00] right numbers, but the numbers that they come up with are in their favor, in my opinion, and not ours.
I don’t want that to happen to my kids. I don’t want that to happen to my grandkids. So I love that we’re talking about this today. I didn’t want to, I don’t mean to interrupt, but I just, that’s the kind of control that the government thinks that they have. And I’d like to take that on.
[00:12:18] Seth Hicks: Well said, and it illustrates the point of the government being on the grab and on the offensive.
And it’s not a government of the people by the people for the people it’s, we’re on two opposite sides of the. And, and th there are attempting to take Vance. I’ll let you jump
[00:12:38] Vance Lowe: in. So the answer to that question right there, and for our listeners is it needs to be well constructed. Life insurance contracts who have identified beneficiaries and ownership of the.
Policies in such a way that there’s no [00:13:00] excuse, there’s no interpretation and there’s absolutely no government control by the way, people probably should understand that a life insurance contract is a will. In and of itself and it completely bypasses probate in every state. As far as I know today, my, you know, I may possibly be wrong, but I don’t think so that beneficiary that will go to that person or that entity outside probate every single time, because that’s how all states and our government treat life insurance.
So I thought I’d just share that with you. That’s important to understand, because for legacy, you’ve got to be able to depend on something and here’s one more great light. I would say whenever there’s changes in government, if government wants to come after something, they certainly can. [00:14:00] But the rule of thumb is it’s always grandfathered with life insurance contract.
And entities because deals have already been struck and certain things and assets have been committed in certain areas that they can’t disrupt them. Normally life insurance changes from time to time costs go up. Costs can go down different qualifications can change. But it doesn’t affect anything prior to the date they set for the changes.
[00:14:32] Aric Johnson: Okay. So let’s walk me through a couple of examples of how this could work. Maybe some, whether it’s client examples or just examples of, of what this strategy can do, and especially where it comes to the.
[00:14:45] Vance Lowe: Okay, Seth, I think Seth has prepared an outline here of a family. Let’s just take it right from the top of this.
This father is putting money into a contract. So let’s walk that through Seth. And I think this should be able to answer [00:15:00] Eric’s questions and, and for the people who.
[00:15:03] Seth Hicks: Sure we’ll give it a, a high level. And then we’ll, we may put some numbers to it to give it more context. Let’s say a father and a mother develop a private banking strategy.
Eric whereby they have insurance policies, whole life insurance policies on each of their lives. And that is the F the foundation for the family banking wealth succession plan. Okay. Now on these policies, there’s a high cash value whereby the father and mother can use the cash value in those policies for investment real estate acquisition, for vacation, or for retirement, for anything that they, they want to and need to.
And it’s there basically with a simple push of a button and you can have a wired in it’s that simple, it’s very accessible. They control
[00:15:57] Vance Lowe: it. Tell them how safe it [00:16:00] is compared to
[00:16:00] Seth Hicks: veins. We’ll go ahead. You tell them.
[00:16:03] Vance Lowe: Yeah, let’s say in a life insurance policy, they, it escapes the Dodd-Frank act because the life insurance companies themselves are grandfathered because they were in existence before the IRS.
Okay. Sounds like I had some music playing here. Sorry about that. It’s important to know that the cash reserves in LA life. Policy with life insurance companies is the safest place on the planet to store money until you want to put it to work or you want to use it. Okay,
[00:16:35] Seth Hicks: great. So the father and the mother have access to the cash value and they can, they can use it.
They, that is the Corpus of their, a family bank. That’s the start of the family bank. Now they’re totally teaching their child. How to bank what the family bank is, where they have money stored and where they borrow money from so that they can understand. [00:17:00] And operate in the family bank when the time comes, when there, I like to call it, uh, the black belt succession.
So they’re teaching their kids and they’re promoting them as, as time goes right now, Eric, I, I have my kids learning about private banking and learning how money is stored in our family bank. And when they want something that, that they, they think they need. How, how that transaction looks, dad, doesn’t just give them money.
They have to borrow it from their own bank and they’ve already accumulated their own money that they’ve earned and various capacities. They’ve got a chicken egg business, they’ve got a jewelry business, they’ve got a golf ball, reclamation business, and all of those things provide streams of cashflow into their, into their.
And they see a bright, new, shiny bike that they want to get, and they have to borrow that money from the bank and they have to create a promissory note and promise to pay [00:18:00] it back. So the next golf ball that they sell is going to be a, the proceeds are going to be used to pay back the note into their own bank.
So they’re always getting the money. And they’re charging themselves interest, which is a tax-free and grows and compounds year after year, without any government intrusion. Now, when the children have a black belt and let’s say they’re 25, 30, 35 and private banking, and they can actually. Have the ability and the wisdom to take over as a, as a trusted steward for literally hundreds of thousands, if not perhaps millions, depending on how much the contributions are, then they take over the cash value of a policy that’s on there.
Okay, father and mother I’ve taken out policies on their own lives and they’ve taken out policies on their children’s lives. And when the children are of appropriate age, the children then become the stewards of each of their own [00:19:00] policy or policies, depending on how many contracts they have in place.
And they began to use and operate and their family bank, their own cash value, their own investment, their own, uh, ne. And they learn how to use that structure. And, and here’s why is because there’s going to be a death benefit that’s paid when the father or the mother come into passing, whereby that death benefit is paid to the, to the beneficiaries on the errors.
That’s the children, and it’s not going to be taxed. It’s not going to be disclosed. And it, and a lot of times it’s multiple millions of dollars. So these children need to have been schooled. Learning this to take that black belt, so to speak and private banking, and then that’s that money that’s dumped into there.
The private bank and is disposable for their, for their use and redeployment into their own family banking succession.
[00:19:59] Vance Lowe: Does [00:20:00] it function the next round of policies eventually on the kids school? It goes into the accounts and it purchases additional policies downline on the family. So this is why it’s multi-generational, the funds are already there to perpetuate it.
And there’s, there’s not even a skip a heartbeat. It actually is as funded higher and higher and higher. This is a perpetual increase. Money pile. Oh, I’m sorry to interrupt. I just wanted to share that just for those death benefits that come in tax-free government, that’s not even reported to the government, by the way, these are private things.
Then those checks come in the government, uh, monitors money that’s going in checking accounts. They’ll see that a death benefit was paid into an account. They don’t get it. All
[00:20:55] Aric Johnson: right. I’m going to jump in real quick, guys. I want to take a quick break. I know we’re getting close to the end of [00:21:00] the podcast anyway, but I want the listener to have some information where they can get ahold of people and where they can get some resources that you guys have.
And they’re going to learn more about it right now.
[00:21:10] Seth Hicks: Do
[00:21:10] Voice Over 2: you see yourself in that story? Do you feel like you are generating a lot of revenue, but are not moving forward as fast as you would? Like? Are you ready? Please call private banking strategies. You said 8 1 7 247 7 7. Or visit us at www.private bankingstrategies.com.
[00:21:35] Aric Johnson: All right, we are back. And I’m actually going to ask Vance. I’m going to ask you, can you give us a little bit more of a, of a clear example, give us some kind of the hard numbers of how the scenario works in this generational.
[00:21:49] Vance Lowe: All right. This is what we do every day. And there’s just, there’s Eric.
There’s just not enough time. So I’m going to do a specific scenario. I’m really going to talk about what I do. [00:22:00] For me, my kids and my grandkids. So the rule of access succession is as adults, we get to a point where we start having hopefully excess money and we put them into a life insurance contract. So in this case, we’re putting $15,000 into our children.
Policies, because we can qualify to do that. The qualifications is a different topic, but just assume our kids can, we can qualify to put that much in, at their ages. We start that process and we start funding that. Now, in my case, I have 10 grandkids. So I started policies on all my grandkids. Also anywhere from $2,500 up to the $15,000, depending on their ages and their qualifications every year when I had, and I had just like [00:23:00] everybody else, qualified assets from 401ks, IRAs, and Ross, you want to move money out either systematically or.
Yeah, tear the whole thing out. You pay the taxes and you immediately, uh, buy as many of these contracts on kids and grandkids as you possibly can. But once we put in $15,000, let’s just take a single one. Now into one child’s account. You are the owner and you are the beneficiary. Not that child, that child has no control over that account.
The same way with the grandkids. The parents are not owners of those policies. I am. And for me, the ownership will go into a trust. The trust will be the owner of all of these contracts. This is how we make it perpetual. Okay. The trust receives the death benefit. The trust then applies for additional insurance on [00:24:00] the younger generation.
To whatever extent they can, but this $15,000 premium gets paid every year for an amount of time. And we start teaching that child here is an account we’re going to do college. We’re going to do your first cars. We’re going to do this. We’re going to do that. However, this child needs to be taught because you’re going to carry on the, the banking legacy.
Instead of a hair inheritance in my situation, I told them they were disinherited and that got their attention. So, so here’s how you access money by using the account? You earn equity into the bank. Would you like your earnings to be high or low? Because I tried it another way and everybody asks, well, what interest rate are you going to do?
And I tell them what we bought a hat and they go, oh no, I can get it here. Well, that’s the game you have to play. If you put it into earnings, how much equity earnings would you like in the [00:25:00] bank? Then they’re going to say hi. I said, well, that’s the interest that we charged them. That’s your equity in the bank.
And the more one person uses, the more equity can have over another when profits can be taken out of the family bank. So this individual learns that. Learns that he has to pay it back or she has to pay it back with interest and then the lights come on. All my money’s back, all the money I’ve paid for this car now is back in the account.
Plus the interest plus the interest in the life insurance contract faults. Here’s a way we’ve talked about this before you get uninterrupted interest. So I hope, you know, that specifically, that’s how we do this. This is how we move money from qualified accounts. And then it’s just math. Eric. This is how long it takes you to make it the tax money back that they took from you.
This is the penalty money that you get back that they took from you here. Let’s do the math [00:26:00] right here in, in our plan. And we have the ways we set this up for our clients, so they can actually see where they’re at, where they’re going and what they want to do.
[00:26:10] Aric Johnson: All right. Well, like you said, we’re short on time.
That was a great way to end this podcast. I think that gives a lot of people, food for thought. And I’m going to ask you one more time for some contact information, because if they heard that last, just that last little bit Vance that you just shared there, I think that was a huge attention grabber, right?
Because that gave another sneak peek into what it could look like. And like you said before, and Seth you’ve said before it’s individualized everybody’s situation is. Erica,
[00:26:37] Vance Lowe: I call that the goosebump factor. There you go. The reason that gets me back on the table to help people is because when the lights come on, it gives me goosebumps.
They win and we all win. This is why it’s so critical. Cool. Yep.
[00:26:52] Aric Johnson: Absolutely. All right. So where can people go to get information? I know we did the little Midroll, but I want to do one more time at the end of this podcast. Where [00:27:00] should people go to get some.
[00:27:02] Seth Hicks: The best place to start is at our website and that’s private banking, strategies.com, www.private bankingstrategies.com and put in your contact information in return for your contact information.
You’re going to get a book which we like to call a red pill book, and it’s going to highlight issues like we’re describing on this podcast on the prior podcast that will enlighten the audience’s mind. To see how banks are, are not your friend and how there are alternatives that you can, that you can benefit from greatly.
So the re the red pill book is the first step to read that you can get it in. Audio version. If you’re on the go or you can read it either way. And also when you put in your contact information, you’re going to start to get emails that are educational in nature that are going to also spot red pill issues that are going to drill down on some of these, these topics.
I had a [00:28:00] client just say to me, two weeks ago, I heard some of your content on a podcast regarding 401k and retirement strategy. But until I got a few emails on it, it didn’t click for me. The light bulb came on. So sometimes Eric people will hear a podcast. They may hear this podcast and it may generate five more questions in addition to what they want to know.
And so those emails are really helpful at explaining things again, and helping people get another touch with us and getting more on the content. So those emails. And the book, and if you’ve gone through those things and these, these principles, these concepts are resonating that Vance and I, and things we’re discussing are resonating with you.
Then you can discover further how it would apply to you and your personal situation by getting on an exploratory call with vans and going through that process. And that all starts on the website by putting in your contact information [00:29:00] and going through that process, I just described.
[00:29:02] Aric Johnson: Absolutely. All right, wait, just a second audience.
I’m actually interrupting myself, which is really weird. But after we got done recording this podcast, Vance, Seth and I were talking about it and we’re talking about how they can help the audience, visualize what they’re talking about and they are creating a loom video that will be linked in the show.
To this podcast. So look at the show notes, there’s a link there that will take you directly to a loom video. So you can actually see the numbers and look at the example that that Vance was talking about an example, so that they can walk through the numbers and see, and to show you how it works. I mean, that’s the important part.
They want you to know how it works. We wanted to insert this little bit of audio into the podcast. Before I close out the show to let you know that there is that little. Don’t miss it, Vance and Seth, as we wrap this up, I just want to thank you again for providing that content and also your contact information for the listening audience.
Cause I, I, I agree a hundred percent there’s for every one, one story you told I’m sure. Five questions came up [00:30:00] so they can go and get more answers. Thank you for your time. And of course our last thank you as always for you, the listening audience. Thank you so much for tuning in and listening to the private banking strategies, podcasts with Vance lo and Seth X.
If you have not subscribed to the podcast yet, please click the subscribe. Now button below this way. When Vance and Seth come out with a new podcast, it’ll show up directly on your listening device. This makes it really easy to share these podcasts with your friends. Again, thanks for listening today for everyone to private banking strategies.
This is Eric Johnson reminding you to live your best day every day, and we’ll see you next time.
[00:30:31] Voice Over 2: 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 call private banking strategies at (817) 200-4777.
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