[00:00:00] Voice Over: 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.
Learn how to keep what you learn 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.
[00:00:39] Aric Johnson: Hello and welcome to private banking strategies with Vance low and Seth Hicks.
Before we get started, I need to let you know, this is a. To have a two-part podcast. The gentlemen are presenting something that you’re gonna want to go and listen to the first half of this. Uh, normally we get, you know, listen to these things in any order. However, they did a great job of setting up a foundation, [00:01:00] uh, talking about putting the equity in your home to work for you.
You really got to go back and listen to that previous one to really understand what this one’s going to be all about. For those that are joining us that have listened to the first one. Seth, can you kind of give us a recap of what they heard last?
[00:01:15] Seth Hicks: Sure. Thanks, Eric. We’re talking about a family, um, in their mid forties, take home pay of about $5,000 a month.
Uh, pretty much up to their neck in debt. Uh, they do have some assets to house, a couple of autos about, uh, Really thing is substantial to speak of an income producing. They didn’t think they had any money to be able to even start their own banking system, uh, with, but after doing the analysis, they, they found that they did, they pulled equity out of their home.
Uh, they scraped some things out of savings and they, uh, liquidated IRA and they came up with about $80,000 to capitalize their bank initially. And [00:02:00] that’s where we are in our story. All
[00:02:01] Vance Lowe: right, Vance, take it away. All right. Uh, incidentally, one of the first things I’ll say is when they liquidated and they took out the equity of the home.
This really raised the ire of her father because now she was doing something out of. And he really thought that they were going to get themselves in trouble. So let’s see if they did or not. One of the first things I want to point out what we’re going to do with this $80,000. So again, if you’ve got a paper and pen, uh, maybe a little calculator, you can jot down your own little notes.
We’re going to take the $80,000 and we’re going to start our banking business. And in the example we gave before, we’re going to put $10,000 of that 80,000 into this bank and policy that’s going to generate immediate, Upfront cash value or the profits [00:03:00] of closeness, around 5,500, maybe up to $6,000 that they can then put back with the original lady.
So if we do the math, we start at 80,000, we’re going to use 10 and put it in the bank that lowers it to 70, but the 10 is going to generate. We’ll say six, and we’re going to put that back with the remaining 70 that we can use now to go buy debt. Well, the actual amount of debt that they were able to buy with the remainder was around $73,000.
They bought the automobile debt and they bought the. Um, boat debt and pretty much the credit card debt. So those payments that we’re going away from on a monthly basis, total up to 2,260 plus dollars $63 [00:04:00] per month. The way we justify and we organize this and our mind is that the two people looking back at us in the mirror, our clients, they’re the ones that are, paying the expenses, the bills, everything else.
And they’re just going to get notification of change of who they’re going to make their payments to notice. I didn’t say pay off the debt. Well, Eric, you know, as well as I do that, if you pay an outside debt off it’s, it’s gone normally, correct? I can’t tell you how many people we talk to that say, oh, I don’t have an automobile debt it’s paid.
It’s paid for it’s paid off. When that is really incorrect, either you didn’t value the money. Oh, you’re not recognizing that that car’s going to wear out. And you’re going to have to replace it. So you’re either saving up or you’re going to have to go in debt with someone else. So you will always have a car payment, [00:05:00] um, a few of these things, but in this situation, there are some very great things that we can learn from this, that people think they know maybe where this client is, but probably don’t have a clue.
Remember that. The 2263 per month that they’re now receiving. In addition to that, they’re going to pay themselves the 600 that was put, being put into the 401k being tied up and almost worthless. And the overpayment of 2 61. Okay. Now 2263 times 12 is $27,156. Here’s what we noticed And we learn right off the bat.
Once money starts moving, you’ve got to make those payments. We now have $2263 coming in. We had to come up [00:06:00] with I’m. I’m not gonna use the money that we had that we put on our bank cause that’s money in our bank. That’s capitalization. So I’m going to use the remainder that we went and bought debt for $73,000.
What we’re going to call that? So to find the value of what just happened to them. Where could you find a place to invest? 73 plus thousand dollars and get an annual rate of return of $27,153 per year. Hmm, what kind of interest is that? So what we do in this case, and we call it the volume rate of return, this is how banks make money.
This is why they lend money. This is why they do what they do. So you take this, I’m going to put a $73, 700 and I’m going to put a, is the amount they had to come up with to put, to [00:07:00] work. So that’s money at work. And we’ll all agree with that. The money coming in off of that, of those monthly payments is 2263 or $27,156 per year.
You take the annual return. Or total of payments and you divide that by money at work. And in this case, we come up with 36.8% volume rate of return. Now, Eric, is that high enough? That’s pretty good. I know that you sound a little disappointed. So what if we throw in totally taxed advantage? Oh, okay. Just
[00:07:46] Aric Johnson: like the cherry on top.
Yeah.
[00:07:48] Vance Lowe: Okay. How long would you like that to last? I think we’ve
[00:07:52] Aric Johnson: asked this question before forever. Are
[00:07:54] Vance Lowe: these trick questions? Okay, so 27, [00:08:00] well, y’all we just rounded at $27,000 a year over a five-year period of time. We soon learn. It’s not about just getting the money at work back. If this fits our budget, which it has up to this point, why not continue to get more of the money back we’ve put into bye.
Bye. Over a five-year period of time. What we’ve turned our money into is $135,780. Not too bad. Right? So this is not why you’re listening to this podcast. The reason you want to hear from us is this is not the power, any financial guru, can make this math up and go forward. There’s something else, a play here that banks don’t want you to know.
And that is what are you going to do with the money back in hand, [00:09:00] the $27,000. It takes the first year for you to accumulate it all. But what if we were to reinvest that and buy more debt with it? And we’re going to assume at the same rate, because this is actually folks, the low end of the return that you can receive.
That would generate that $27,000 would generate $10,000 for you to a year or two, along with the 20,000 that is generating from the initial loan. And if we continue to take that money and buy additional debt at the same rate, we’re going to be adding an additional $10,000 per year of additional money coming back to.
So if we take all of those. That total is $123,000. So 10, the first year, double that the second year [00:10:00] three of those in year four and four of those in year five. So each year we’re taking $27,000. We’re buying more debt and we’re putting it to work and getting the average same rate of return. Just want to make sure that it’s hard to not see the numbers.
And this is why the, uh, eight year analysis is so important because the numbers are just right there. So you can look at them. So you add 123,000 to 135,000. We’re at over $267,000 now, how are we doing great,
[00:10:36] Aric Johnson: but how, how do you, how do you buy more debt?
[00:10:38] Vance Lowe: They bought only $73,000 of debt in year one. So that is a perfect question.
So I want to, let’s follow the flow here and show you what happened in year one. By the end of year one, they have $27,000. Plus in their accounts, [00:11:00] they reduce their debt by 73,000 and they have $2,263 a month coming in. So we go to year two. Now the money’s back in the policy, we’ve got $27,000 in the accounts.
So. Pay $10,000 in premium and we’re going to go buy more debt. And so the results of year two is they bought another $23,000 worth of debt. They put 26,000, well, $27,000 in their account, but the money didn’t, the cashflow didn’t change because this money now is the only debt they have remaining is their house. Seth,
Uh, you haven’t had much to say here and, I don’t know when, uh, we want to break here, but would you please describe one of the common things we have people do with mortgages that is called recasting and what recasting is versus refinancing? [00:12:00]
[00:12:02] Voice Over: Do 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 for help please? Call private banking strategies set eight hundred seven two hundred. 47 77 or visit us@wwwdotprivatebankingstrategies.com.
sure.
[00:12:30] Seth Hicks: So recasting is a way of avoiding paying the banks a large volume of interest, and it’s a way to take a large chunk. And effectively apply it towards principle and eliminate, uh, large, uh, interest yield curves on, uh, on your mortgage. So if everyone has financed a home, you’ll know there’s a [00:13:00] truth in lending disclosure.
Which tells you the total volume of interest, you’re going to be paying over 30 years or 20 years or whatever the term of your mortgage is. Well, if you have a chunk in your own private bank and you want to pay down the mortgage, uh, and eliminate, uh, years and years of interest payments, that’s how you would do it with recasting.
And we’re not talking about refinancing the only. People or players that, uh, benefit from refinancing or the mortgage brokers and the banks and statistics show that people either sell their home by, they move or they refinance about every five years and all that does is make them perpetually pay interest.
So recasting is what you want to ask us about when you’ve got a mortgage chunk to pay.
[00:13:52] Vance Lowe: That’s a beautiful definition. In this situation, this client actually did recast the mortgage, but we’re [00:14:00] not showing that in the numbers because we’re not sophisticated enough to actually get that in the software yet.
So we’re pretending that you cannot recast, which hurts our numbers, which we kind of like. People usually complain that the results, but we like complaints that, Hey, our, our numbers are higher than what you’re showing. Um, we’ll, we’ll take that all day long. What I’m trying to go through now is the running a system there.
Accumulating this monthly payment back into their accounts. And by the way, in your one and receiving that monthly payment, that is a second and third touch of the same dollar because they used it, they earned it and then they bought debt. And now we’ve got monthly coming, uh, payments coming back from those payments.
And so we’re getting retouches on these dollars. This is how banks do it. This is how and why banks get the money back so they [00:15:00] can use it again. All right. And so w we have several goals. We want to get completely out of debt, and we want to expand our bank so year in and year out, or going to follow this system.
And we’re going to take advantages when we can. We’re pretty happy. That the debt on the house is going down. We’re not incurring any more debt. So in year three, They were able to, uh, collect the $27,000 because that monthly didn’t flow, they were able to low, lower debt by 21,000. But guess what?
Instead of 10,000 that they put in the bank, they were able to double that. And literally we call it starting a second business. They actually created a second policy and now they’re paying. Two policies, a $10,000 in there all paid by the system. Nothing else is coming out of pocket. There’s there’s, there’s no changes.
It’s all being run by the system. So you fast forward a little bit, [00:16:00] uh, on that, uh, you go into, let’s just take a look here for a minute. In year five and six in year five, we were able to. To add a third business still. We haven’t got the property paid for. Could we postpone increasing the business and put that money on the mortgage faster?
Yes, but it’s kind of a catch 22 because the faster you build the bank, so you want the best of all worlds. So we’re trying to play midstream here, and this is what they chose to do. So the near five, remember. The schedule of premium that we pay the first four years, um, the $10,000. And then it drops down to, 40%.
So in your five they’re paying on their old policy, $4,000 a [00:17:00] month and there are two newer policies, another $10,000. Yep. No,
[00:17:05] Aric Johnson: that’s good. So 4,000, yeah, $4,000 a year for the first policy. And then the second policy there at $10,000 a year, correct?
[00:17:13] Vance Lowe: It’s thank you very much. Guess what happened five years and one month later, but you can’t guess, ah, they paid their house off.
In other words, they, they, they finished buying the debt. Now the cash flow changes. So in running a bank, The game is to increase that monthly payment, that monthly cashflow putting more and more money to work. Well, the very best safest scenario here is for us to be a client and for us to buy our own debt.
Right? So, but now the monthly went up to $3,123 a month. And they just don’t look back. [00:18:00] They go forward further and further and further over that eight year process, they literally had four policies. Two of them were at $4,000 each and they had two at $10,000 each. And they’ve kind of felt like as, as the demand was there, they would increase and go that way.
Now they have a problem, Eric. I think about $3,000 a month coming in income tax free, all building up, all, going back into their policies. No more debt to buy.
[00:18:33] Aric Johnson: That sounds like a real problem.
[00:18:35] Vance Lowe: Jeez. You have any debt you could sell them?
[00:18:39] Aric Johnson: Absolutely. Yeah, they can call me up. Yeah.
[00:18:43] Vance Lowe: So a couple of things, uh, south on, uh, I want you to expound on this.
I’m going to open up a couple of, of mortgage topics that are absolutely critical. And, uh, Seth has got the in-depth knowledge here. Number one, people are under the mistake that they can make [00:19:00] extra principal, principal payments, and it will help them out. It was. Never helped them out and less. They go to the end of the mortgage.
It doesn’t even save them a penny of interest until the back end. So any principle isn’t applied right there at that time, it’s applied to the back end and it moves for. So way out there 30 years and we start paying a little extra, it starts advancing. And most of that is principle there. So, uh, we save on that end, but we don’t save any interest.
And that’s why several countries have outlawed our mortgages. So it’s very important. South Utah, uh, hit a topic on, do yourselves a favor, tell your loved ones. Everyone else do not refinance. [00:20:00] Why, why shouldn’t we refinance when
[00:20:03] Seth Hicks: you re when you refinance there? Uh, you’re gonna, uh, start all over on the interest versus principle, uh, yield and curve.
Um, and, and everyone should be familiar with, uh, the truth and lending disclosure. When you purchase real estate, the real cost of interest is it laid out there. So if you have a $500,000 home, for example, you may pay. Uh, three times at and interest costs. And w you make your first payment, it’s effectively all interest in no principle.
And it’s like that for months and months and years with a very small increase, uh, applied to principal, and most of it going to intrust. So at year five, you’re still paying very, very little principal and mostly interest. And if you refinance at year five, or if you sell your house and move and you enter into a new mortgage, Or refinance that mortgage.
[00:21:00] You’re going to start all over at the very bottom of that curve and be paying all interest and no principal. And the, uh, the way that you avoid that is through, uh, the, uh, the ability to recast the mortgage. Rather than refinance. And that’s something that you can ask us about when you, when you talk with us.
[00:21:21] Vance Lowe: So, so the average damage that people occur thinking they’re better off because literally people think they’re paying, 2.9 or 3% interest when they will never ever pay that until the very, very last page. And why they get to announce that this is a three per cent mortgage. I don’t know, but there’s 360 payments in a or 30 year mortgage.
And if only the last one is 3% or, very close to that. But what I’m trying to tell you, that’s where the damage comes from. People avoid, you know, they actually go into hardship to [00:22:00] try to avoid paying any interest on a credit card because it’s twenty-five percent. It might even be 30% and they’ll they’ll refinance all day long and pay 96% on their mortgage.
From there.
[00:22:15] Aric Johnson: He said at the beginning, you know, make sure that you, maybe you have a pen and pen, paper and pencil or a calculator. And I’ve got a calculator sitting here and I just got a little sick to my stomach because I’ve been in our, we’ve been in our home for 10 years and I know what the purchase price was, and I know how much we owe right now.
And the difference there is right around $43,000. Um, and. Uh, these 10 years of payments, I just did the calculation and I’ve made $144,000 worth of payments. I made $144,000 worth of payments, and I only, you know, I only took my loan down by about 42. So that’s a hundred
[00:22:53] Vance Lowe: grand now, can you see, can you see the power of self banking?
What if you could own that [00:23:00] finance? What if we could then do that now set it up for our extended family. Folks there’s so much here that you need to understand it. You’re already at the end of the tunnel. Let’s let let’s wrap things up with how. They get in touch with us what we would like you to go through.
Because our very first actual meeting, we, we do a, uh, exploratory phone call just so we can see where individual is, but when they fill out that, um, It is our first meeting and we have, we get extract a commitment out of people that, okay. Do you want the strategy in your life or not? You’re not gonna know how to run it.
You’re not going to know where you want to start, but you’re going to see with your own number, the results of practicing this month by month, but you have to have the background in order to make [00:24:00] that decision. A car. So Seth outline what we suggest people to do that are interested in taking the next step and how should they do it?
Sure.
[00:24:12] Seth Hicks: Well, like we talked about before, we’ve got a pretty vast. Uh, asset base on our website at www.privatebankingstrategies.com, and there you’ll get some contact information to us whereby you subscribe to our email list and we, uh, send you content that on defense. Fixed, including this one asset protection and things that deal with the seven pillars of, of private banking strategies, tax-free growth, financial privacy, how to, uh, leave your legacy to your heirs.
Tax-free and these subject matters, uh, are, are, are pretty robust. And the podcast that we are producing here with you, Eric, there’s a whole, there’s a whole litany of podcasts that deal with different [00:25:00] topics and people will find themselves in the various instances and scenarios of, of those podcasts. Um, we also have a free book and when you give us your email, you get the book and it’s kind of a red pill book.
We like to describe it as. Whereby we’re identifying issues that people, uh, many times they’re not aware of. And sometimes they are such as the centralized banking, uh, advantages and how they get the money and how you’re losing your money, how you can get your money back with the type of, uh, private banking strategies in place.
So that’s how they start. They get. They read our emails. They listen to our podcast. If those things are resonating with you, then we we have you schedule a call with Vance and you’re in the intake request form that I mentioned previously. Uh, and this two-part series is a asset, uh, and liabilities worksheet takes about five minutes or less.
And you. Produce that [00:26:00] for your call with Vance and he gets into your numbers and identifies exactly how this can work for you. Now with our couple that we’re talking about, they were almost $200,000 in debt and they had assets that were all depreciating, effectively, autos and boats and the, and the house.
And they didn’t see any. To actually implement this and still Vance got us, uh, sleeves rolled up and he got his hands dirty with these folks and showed them you got $80,000 to work with. And before they know it, that all of their debts are paid off, their house is paid off and they’ve got all this cash value sitting in policies that they’d never thought that they could even put together all from implementing the private banking strategy.
[00:26:42] Vance Lowe: Uh, share with him what, uh, dad ended up doing. So this is much really the, I think the pay off, well,
[00:26:52] Seth Hicks: dad was a, he, he was a manager of a branch bank and he totally did a 180. He came in to Vance. And [00:27:00] basically, uh, conceded that he had, uh, been wrong with his theories and strategies. And he began to put all of his children into private banking strategies and, and really have a, a turnaround.
[00:27:14] Vance Lowe: Well, hopefully he didn’t
[00:27:15] Aric Johnson: lose his job at the bank because
[00:27:17] Vance Lowe: the word gets out. No, but he did, he did swear us to secrecy. This is why we’re not naming the bank. He told me he had no idea how his bank makes money. That he’s a salaried employee. His job was to make sure that his branch passed all the audits.
[00:27:35] Aric Johnson: Absolutely. Well, again, it’s that red pill scenario. Once you kind of get a glimpse behind the curtain, you really, really begin to understand. So thank you for taking the time to educate all of us. I get more excited every time we talk and you know that. So, um, I’m, I’m excited to be, uh, to, to move forward with you guys as well and the podcast and other things.
Um, again, thank you so much for your time.
[00:27:58] Vance Lowe: Your Welcome. It’s such a [00:28:00] pleasure to be able to talk and. Well look forward to the next one. Yep.
[00:28:04] Aric Johnson: Sounds good. Of course. Our last thank you goes to the listening audience. Thank you so much for tuning in and listening to the private banking strategies podcast with Vance lowe and Seth Vance.
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 list. This makes it really easy to share these podcasts with your friends and family. Again, thanks for listening today for everyone on that private banking strategies.
This is Eric Johnson reminding you to have your best day every day, and we’ll see you next time.
[00:28:34] Voice Over: Did that story feel like it was about you? Do you feel you should be making more progress toward your financial goals? 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 eight one six. 204 7, 7, 7. Or visit [00:29:00] us@wwwdotprivatebankingstrategies.com.
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