[00:00:00] Intro: Welcome to Private Banking Strategies Podcast with Vance Low and Seth Hicks, your secret weapon to protect your assets and never have to start over financially again. Vance and Seth help high net worth individuals, families, business owners, and investors, structure and asset protect. Tax free 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.
[00:00:49] Eric (Host): Hello and welcome to Private Banking Strategies with Vance Low and Seth Hicks. Gentlemen, how are you guys? Doing great. We’re doing absolutely great. Fantastic. I know that we’ve got an [00:01:00] interesting topic today, and it’s actually one that I haven’t through our entire time together. I don’t think I’ve actually thought of this question because I know how the system works.
[00:01:08] Eric (Host): I know what it’s based off of. As far as, you’ve guys have described it beautifully in previous podcasts, how the, uh, private banking strategies work and what it’s built off of, which is basically insurance, correct. Yep. And then the, so the question comes up, and this is what you’re covering today. What if I’m uninsurable?
[00:01:26] Eric (Host): What if I’m uninsurable? How does it work for me? So I’m really interested to hear what you guys have to say.
[00:01:32] Vance Lowe: Well, I guess I’ll start things off and, uh, Seth will correct me if I, uh, say something wrong here and, um, maybe take a deeper dive as we go along here. One of the common questions we get, or it’s a shocking bit of news for people when they fall in love with the strategy, the lights come on and we apply for these banking contracts only to find out that.
[00:01:58] Vance Lowe: Health wise, [00:02:00] they don’t qualify and they are uninsurable. Mm-hmm. And years ago I was actually taught this very story. One of the first stories that Nelson taught me was this story and tied back into the beginning of the book, it’s all about how we think and the use of our imagination. Here we have, uh, let’s paint a scenario here.
[00:02:29] Vance Lowe: A 50-year-old father, you know, a husband, and because of his work, which is in, uh, um, dangerous things and some health issues, he is totally uninsurable. So he’s learned about the strategy. Um, he’s done everything. He loves it, they want to do it, but he’s found out that he is uninsurable. So, Seth, [00:03:00] tell us, you know, what are some of the first, uh, things that we might do to an, an individual who is in this?
[00:03:11] Vance Lowe: Situation. They’re a family person. They’ve got kids and everything. What’s the first thing we tell ’em?
[00:03:17] Seth Hicks Esq.: Well, the good thing about. Using private banking strategies as for the value and benefits that that we’ve presented, uh, and what really draws people to it is the banking aspect of it. Eric, we’re not solving for a death benefit and, and life insurance, so I.
[00:03:36] Seth Hicks Esq.: The fact that someone is uninsurable becomes inconsequential if you can, uh, find other lives to insure. So if you have other family members, uh, wife, children, you’re able to ensure those people’s lives and. Practice the banking system where you get all of the seven pillars that we’ve talked about, [00:04:00] uh, so many times on the podcast.
[00:04:02] Seth Hicks Esq.: The asset protection and financial privacy and, and legacy wealth transfer without taxation. You get all those things you. When you have an insurable interest. So the key word there, and the key phrase is a legal term of art, and it’s, it’s having a le a a legal insurable interest in the life that you’re insuring.
[00:04:26] Seth Hicks Esq.: And, uh, Vance is, you know, we don’t have to find a blood relation to do ship, to do that. You can do that through business relationships.
[00:04:35] Vance Lowe: Right. So Eric, let me bounce this off you. You’re this father. All of a sudden you found out you cannot be insured and you want to adopt this thing, you want to take this and put money into it and create, uh, passive income later on.
[00:04:54] Vance Lowe: How would you feel? How will you feel when you find out that instead of going to plan A, we can go with [00:05:00] plan B and you can still accomplish everything?
[00:05:02] Eric (Host): Well, yeah, I mean, I’d be super excited. We can do it. My first inkling would be to look to my wife, right? I mean, if it can’t insure me, can we insure my wife?
[00:05:11] Eric (Host): Okay. I’m sure there’s other ideas
[00:05:12] Vance Lowe: as well. And so now what we’ve just triggered, and Eric just proved it to us, the brain engages, it starts thinking, oh, thank you. And it starts solving, you know, the, the question or, uh, the problem, right? Every once in a while it works well. That’s, this is what this strategy and what we’re trying to do here, so.
[00:05:38] Vance Lowe: He and his wife agree that this strategy, they’re going to be far better off. Um, further in Nelson Nash’s book, he does some, just some important information and it’s clear back and towards the end of the book and, um, turning to it right now, since it’s got a book and it says points to consider, [00:06:00] there are only two sources of income people that work.
[00:06:06] Vance Lowe: And money at work. The sad thing in life today, especially in America, is people have never discovered money at work. Everyone thinks that people we have to go to work and be at work, but those who discover that passive income or putting money to work that makes them income no matter what, uh, they’re much better off.
[00:06:34] Vance Lowe: And a lot of people feel like, well, I can’t afford that. I can’t do this, I can’t do that, uh, when they can, uh, because it’s again, all about how we think. So the reason I’m throwing that in there right now is because this scenario right here solves that line of thinking he wants a retirement. Um, in essence, uh, you know, and.[00:07:00]
[00:07:00] Vance Lowe: I think Seth and I are pretty much agreeing that we’re gonna start throwing out the word retirement and going into passive income, because retirement in America is pretty much a fallacy. It’s just a lifestyle change. Mm-hmm. And, uh, the way things are going, we doubt the economic situation, uh, that is gonna be there.
[00:07:23] Vance Lowe: Like maybe people are planning on. Anyway, let’s keep going here. So they agree that they want to set aside, they want to put in to this strategy $20,000 a year, and instead of putting it on the wife. They’re gonna put it on the daughter. And at that time, her name is Jill. We’ll say she’s, um, 20 years old.
[00:07:49] Vance Lowe: Um, 23 years old, excuse me. And so they can do that because they have an insurable interest in here. So she takes [00:08:00] the, uh, life insurance exam and she qualifies fine. And so they start putting. $20,000 into the this banking type contract. The contract is made up of different components. We don’t need to go into that ’cause we’ve already done that in other podcasts.
[00:08:20] Vance Lowe: So he does that for 20 years. Now. This guy’s. 50 years old. I think I said that right at the beginning. He puts $20,000 in every year for 20 years and he stops. Uh, the contract is got some life insurance that’s paid up at age 65, so the premiums are paid until age 65, but he put money in this thing all the way until he is 70 because.
[00:08:53] Vance Lowe: Policy policy’s not on him. Right?
[00:08:57] Eric (Host): Yeah. So when you, I want you to clarify that. 65, [00:09:00] you said it’s, it’s paid up at that point, but not when he’s 65 or, or is it paid up when he’s 65? Aha. Okay, let’s, let’s find
[00:09:08] Vance Lowe: that out because what we’re gonna see here is that this is totally gonna LA act like a life insurance policy on him really.
[00:09:18] Vance Lowe: Okay, so here’s, here’s the situation. So he’s gonna put $20,000 in here. He’s gonna let the insurance company manage it. Now, I’ve been a money manager all my adult career, you know, life managing assets, been very good at it, but I am not as good as those people in, you know, employed by the life insurance carriers.
[00:09:43] Vance Lowe: Outside the life insurance carriers, I could pretty much stand on my own. Our company, uh, you know, could fight with the best of them, but the insurance companies just, they’ve had an art into the management of assets for hundreds of years, [00:10:00] conservatively, you know, they don’t have to take all kinds of risks to get what they’ve got.
[00:10:05] Vance Lowe: So he left them manage the money in there, and then at age. 70. He took out $28,500. Every year. From that point on, that was the passive income that he wanted to create that was gonna replace, uh, income for him. So when he, he reached age 70, he started taking out, now he did that a very special way. Remember, for the first 20 years, he put $20,000 in every year, and for 15 years he took out $20,500 and he.
[00:10:48] Vance Lowe: Surrendered that as base, he took that from the base of the policy and he did not have to pay any tax on it. At the end of [00:11:00] 15 years, he now has all of his money back. If you do the math and everything from what he put in to mm-hmm. What he, uh, has taken out now. Now he’s age 85 and this father dies at age 85.
[00:11:21] Vance Lowe: If he lived longer, he could continue to pull out $28,500 until he does die. But at age 85, let me share a few things that happen
[00:11:40] Vance Lowe: There is when he dies, 1.1 $10 million in cash value in his policy left.
[00:11:55] Vance Lowe: And who’s the policy on here? Seth, the daughter, Jill. [00:12:00] Okay, now he put the money in, he got to pull the money out, and he’s leaving to his wife and daughter over a million dollars. Doesn’t that sound like a life insurance policy to me? I mean to you guys.
[00:12:20] Eric (Host): Absolutely. Well, yeah. But it’s still in play. It’s not like he’s, he’s leaving the policy ’cause it’s on her.
[00:12:26] Eric (Host): He’s leaving the policy to her and, and his wife. But it’s not like a policy that was on him that paid out to them. Right. It’s, the policy is still active.
[00:12:36] Vance Lowe: So here’s the discovery. I, I, I want us to share. I think this might even be better. Than having the policy on him. Oh, yeah. Because now, right, because it continues to grow with her.
[00:12:50] Vance Lowe: Yeah. So let’s let, let’s follow this along. Okay. So she’s now 57 years old. Right? 15 year, you know, years later, she, or, or excuse [00:13:00] me, 20, 35 years later, she’s 57 years old when he dies. Mm-hmm. She decides. That she doesn’t wanna manage it, so she’s gonna leave it with the insurance carriers to manage for the rest of her life.
[00:13:18] Vance Lowe: Okay. And.
[00:13:24] Vance Lowe: She decides she’s never gonna pay any more premium to it. You know, because they quit that after the first 20 years, there’s not any more money going in there. But these contracts, uh, create ownership with the life insurance carrier and they have minimum guarantee growth. But in addition to that, they also have profits, which are dividends and they can.
[00:13:48] Vance Lowe: Increase substantially. So in this case, what she decides to do is wait until she is age 70, [00:14:00] and then at age 70. Now remember all the basis of the, um, policy was withdrawn by dad, so the rest of it is nothing but. Would be profit and normally profits would be taxable, wouldn’t they? Mm-hmm. But in this situation, she doesn’t surrender the cash value and take it.
[00:14:30] Vance Lowe: She borrows against it and in her situation, she can borrow up to $150,000 every year for the rest of her life.
[00:14:48] Midroll: 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 [00:15:00] call private banking strategies at (817) 200-4777 or visit us at www.privatebankingstrategies.com.
[00:15:26] Vance Lowe: Hmm. So how can you make that, how. Let’s go back and, and maybe take a look at other alternatives, uh, 4 0 1 Ks or retirement programs, old pensions, uh, things like that. What would it take, you know, to put an amount of money in over a period of years, be able to pull all that money back out tax free, and then leave.
[00:15:57] Vance Lowe: Another two and a half, three times [00:16:00] that amount to your heirs. Let them use that money. Pull out another 10 times that, and be able to do that tax free if she borrows the money from the policy. There’s not a, it does not trigger a taxable event. And so let’s say she does that until she’s 90. Women live a little bit longer than than men on, on the norm.
[00:16:28] Vance Lowe: Uh, she’ll, she will have withdrawn over three point, you know, $3 million, 3 million, $150,000. Well, when she dies. Say at at age 90, she’s taken all that money out. Guess how much she’s leaving to the younger generation? Another 2.8, excuse me. 2.3, almost $2.4 million to carry on this legacy. [00:17:00] Now, Seth, have we talked anything about banking?
[00:17:05] Seth Hicks Esq.: No, no, it’s just strictly straight on the terms of the policy.
[00:17:10] Vance Lowe: So in this podcast, and help me out here, uh, identify some, uh, uh, additional points. You two. We have a contract here that switches us or allows us to go from working. To passive income, to money working for us in an environment that will be taxed advantaged throughout our lifetime.
[00:17:38] Vance Lowe: And I think even today is probably more lucrative. Uh, the chances of of this happening is ironclad versus risking it in the market or in business, or even in real estate or anything else. But I think that, uh. Being able to pass on the [00:18:00] 2.3 to $2.4 million to the next generation. If we’ve taught them the same thing, then her kids could put it on their kids.
[00:18:14] Vance Lowe: They could live off
[00:18:15] Eric (Host): that income and go forward. Yeah. I I, I’ve got a question though, because you said something back there. So I, I know that when the father passed, um, it was like $1.1 million to, to the daughter. Now, she waited 23, 24 years, whatever it was before she started drawing money from the policy.
[00:18:33] Eric (Host): And, and you said that she was borrowing the $150,000 a year. She did that for 20 years. Right, so you’ve got the, you know, 3.15 million that she has drawn off the policy for, for 20 years and she’s borrowed it. That’s why there’s no taxable event. How does that get paid back, or how is it possible that at 90 when she dies, she’s delivering 2.3 million to her heirs?
[00:18:58] Eric (Host): If she’s borrowed this [00:19:00] money, how does that get paid?
[00:19:02] Vance Lowe: Eric, you’re, that question is absolutely right on point. This is exactly what I think a lot of people are gonna say, okay, well guys, they pulled a lot of money out. Mm-hmm. Says it’s borrowed, it’s gotta be paid back. Remember, we never borrow the cash value from our policies.
[00:19:21] Vance Lowe: We always, since we’re owners, we borrow the cash reserves of the life insurance company, those, that money still in the policy when she dies. The outstanding loan is paid off from the cash value in her policy and the remainder $2.4 million goes to her beneficiaries.
[00:19:43] Eric (Host): Okay, so if I’m doing my math right, then you’re saying that she, by the time she was 90 and she had pulled out 3.1 or whatever you’re talking, the policy was, the value was around 5.5 million at that point?
[00:19:57] Eric (Host): Absolutely. Exactly. Wow, you got it. Wow. [00:20:00] That’s amazing.
[00:20:00] Seth Hicks Esq.: Okay. And one of the things that I, I think is important, we’re throwing a lot of numbers around here, and, uh, the, the nature of the wealth curve is, uh, illustrated in what Einstein called the eighth wonder of the world. It’s compounding interest, the compounding nature of, uh, money.
[00:20:24] Seth Hicks Esq.: Year after year in a tax-free environment. And we have a little excerpt in our book that we offer folks that helps spot some of these issues. And Vance, and I’ve talked about this before, on prior podcast, a penny, uh, compounded, uh, every day. For a month by, by one x, I mean by like a penny compounded to two, to four to six.
[00:20:49] Seth Hicks Esq.: At the end of those 30 days, you’re at 5 million plus. And in total, uh, value. And uh, he and I chuckle because the first time he tasked me with [00:21:00] that exercise, I’m doing it in my head and about. Day 15, I said, there’s no way it’s gonna make $5 million. And he said, just keep doing the math. And so I did. And by about 24 or 25th day I realized it is gonna make 5 million.
[00:21:13] Seth Hicks Esq.: Mm-hmm. Um, and so that is the power of compounding interest within these, uh, well managed. Life insurance contracts and policies. She’s really doing nothing. She’s just letting that money compound and grow year after year. To the extent that, I mean, we’re talking about the dad, star 20 is 50, gives it 20 years and, and then she’s giving it another from 57.
[00:21:41] Seth Hicks Esq.: To 70 before she pulls anything down. You’re 33 years and add another 20 years, and you’re over 50 years of total compounding interest from that, uh, initial principle. Uh, so that’s. That’s something that people have to understand and actually have a light bulb [00:22:00] come on like I did, to the real value in compounding interest.
[00:22:05] Seth Hicks Esq.: And those dividends that are being paid into that policy, they help create that acceleration. And if you look at this on a graph, the initial years are, you know, a slow, steady climb, kinda like up. Up a, uh, something, you could walk up slowly and then when you start to get further on in years, it starts to go up at a much more parabolic rate, where you’d be rock climbing with ropes instead of walking up the side of a manageable hill.
[00:22:36] Seth Hicks Esq.: Mm-hmm.
[00:22:38] Vance Lowe: Yeah, folks, what? Uh, well, there’s a couple o of, of takeaways here. First of all, all of these numbers, you can go in and completely read this in Nelson Nash’s book, becoming Your Own Banker, and you start on page 82. Uh, the, the graphs are there, the contracts there, how we got to all of those numbers.
[00:22:54] Vance Lowe: It’s all there. Okay? But let’s not overlook [00:23:00] that the perpetual banking or the perpetual motion, how has started, it doesn’t have to end. Okay. He started with nothing. So one full generation, one family. When the child finally dies, there’s now $2.3 million to pass down to the heirs. If we don’t give that out in inheritance, if we put that back into contracts on grandkids lives, the older generation of those grandkids could then continue.
[00:23:37] Vance Lowe: Uh, you know, the, the math would have to be redone, of course, and I’m not sure. What it would be, there would be a, an amount of passive income immediately for that older generation. For like her kids, uh, her kids by the time she’s 90, or probably grandmother, you know, grandparents. And when she gets done with it, it could be picked up and it could [00:24:00] multiply if, if they start doing banking and start putting the profits of, of, of lending money in the.
[00:24:07] Vance Lowe: Uh, into these contracts, it would become exponential. This is only one contract on one life. Never doing anything except letting the insurance company manage it. So, eth I think you hit it on the, on the head that, uh, so much can be accomplished here. How hard. Did the this family have to work to get this passive income?
[00:24:38] Seth Hicks Esq.: They didn’t work hard at all. In fact, we didn’t even talk about getting multiple touches on their money. And as they’re taking, um, uh, you know, draws down, actually putting that into other investments, which created a return on that investment and they cycled through the bank. And if you were to analyze that there.
[00:24:59] Seth Hicks Esq.: Their [00:25:00] wealth curve would even be larger and and faster. So this is simply just looking at, set it and forget it type strategy and act actually consuming all of the draws. Uh, the father consuming the draws that he takes when he turns, uh, uh, 70 of 28,500 in passive income, no tax. On that a year. And then, uh, the same with the daughter Jill, taking 150,000 a year, um, tax free.
[00:25:34] Seth Hicks Esq.: Not putting that to use, just effectively eating it. Mm-hmm. And so if they actually integrate the principles that we teach, they’re going to have known how to get multiple touches on the same dollar, get a return on that, uh, money that they’re pulling out and drawing down on. And the, the wealth curve just kind of blows your mind.
[00:25:55] Seth Hicks Esq.: And so we we’re throwing a lot at, at folks, throwing a lot at the, the audience with [00:26:00] this, and you have to understand. Compounding nature, you have to understand multiple touches on the same dollar to really grasp the, these concepts. Um, but it actually is stunning, um, when you get ahold of it.
[00:26:14] Vance Lowe: And this is why Nelson puts this, uh, in his book, and this is why we’re talking about it now.
[00:26:20] Vance Lowe: It’s, it’s the use of brain power and being able to get something working for you. Everybody lives their life day in and day out. They go in, they work hard, they put up with all kinds of harassment, taxes and everything else, and then they just spend the money and they’re not any better off. You know, uh, tomorrow than they were today.
[00:26:42] Vance Lowe: Many of them, uh, are worse off. So I want to leapfrog, I don’t know if that’s the right word, but I wanna take this thought and I wanna move, uh, in our next, uh, podcast. It may take, uh, one or two more podcasts, but I want to go in [00:27:00] and, and think. Challenge some of the things that we normally do in, in life, the way we, we perceive life should be with this banking strategy, this, these contracts.
[00:27:15] Vance Lowe: So I think one of the, uh, podcasts we’re gonna do is, um, and Nelson also has this in his book, so I want to share this and I want us to develop the uh, um, concept of. Going to college. Um, here’s a question for you, Eric. Did your parents want you to go to college?
[00:27:38] Eric (Host): Yeah,
[00:27:38] Vance Lowe: they did. My parents wanted me to go to college.
[00:27:42] Vance Lowe: Seth?
[00:27:43] Seth Hicks Esq.: Yeah. Um, my, my parents strongly influenced me to get a college degree and go on to law school.
[00:27:51] Vance Lowe: Okay. And I did that with my kids. And I put three of my four kids. Through [00:28:00] college. I ended up paying four tuitions with three of my kids. Two, one took two tuitions at the same time, if you can believe that.
[00:28:08] Vance Lowe: The third one or what my oldest one, I, I still paid his tuition, but he went to a trade school. And here’s why I want to do this analogist, because this is true in my life. And again, this will be for another podcast, but it goes along with this thinking. What is the purpose of a college degree? Most of the time, at least when I was growing up, I mean it was the, the drive.
[00:28:39] Vance Lowe: You go to college, you learn how to think and solve problems. That’s not the case today. Today it’s getting certified. Mm-hmm. Get that diploma, get certified, and they are. I, I’ll put out there to everybody. You [00:29:00] can’t get a better job just because you have a, a college, uh, degree now, because the, uh, employers and the industries know that these people aren’t coming out as thinkers and problem solvers.
[00:29:14] Vance Lowe: They just have the degree. So what would happen, you know, let’s, let’s kind of give the title maybe for the next one. Uh, um, if. We didn’t go to college who maybe could end up with the most money, start using that money into a one of these contracts versus, um, spending the money on college even, even if you went into medical school.
[00:29:41] Eric (Host): Hmm. Interesting. Uh, alright, so that’s our next podcast. Yeah. Okay. Well, gentlemen, anything else for today’s podcast that we need to close out with?
[00:29:52] Vance Lowe: Seth, just tell ’em how, you know, if they wanna find out more about us, uh, how they get ahold of us.
[00:29:58] Seth Hicks Esq.: Sure. Well, there’s a lot of [00:30:00] information in this podcast, and this is getting more granular than, than we get sometimes, but, uh, you can find a.
[00:30:07] Seth Hicks Esq.: Ton of valuable resources on our website@privatebankingstrategies.com. That’s private banking strategies.com. And there, when you visit the website, we’re gonna, uh, as a gift to you for visiting the website, and we give you a, a free book and that either comes in, uh, written form or an audio form, and it’s entitled What the Banks Don’t Want You to know.
[00:30:32] Seth Hicks Esq.: What they don’t want you to know. And we, in that book, we begin to peel back some of the layers of why private banking is so important for folks and, and why so many people that don’t know about it, uh, becomes so enthralled, uh, with the values and benefits of it. So we’ve got a lot of podcasts that we’ve done, Eric together, as you know.
[00:30:54] Seth Hicks Esq.: Mm-hmm. We’ve got, uh, valuable email content that we send to our audience. We’ve got all [00:31:00] sorts of other, uh. Content that helps educate and, and help people understand what we’re doing.
[00:31:07] Eric (Host): All right. Well, Vance, Seth, thank you so much. This was a great podcast. Those numbers are staggering. I hope folks, uh, take a look at that and, and get into those resources.
[00:31:16] Eric (Host): Gentlemen, thank you so much for your time.
[00:31:18] Seth Hicks Esq.: Thank you, Eric.
[00:31:19] Eric (Host): Thank you. You bet. And our last thank you, of course, goes to your listing audience. Thank you so much for tuning in and listening to the Private Banking Strategies Podcast with Vance Low and Seth X. If you have not subscribed to the podcast yet, please click the subscribe now button below this way.
[00:31:31] Eric (Host): When Vance and Seth come out with a new podcast, it’ll show up directly on your listing device and we humbly ask that you share this podcast. Rate it and leave a review is this actually does help others find the show. Again, thank you so much for listening today. For everyone at Private Banking Strategies, this is Eric Johnson reminding you to live your best day every day, and we’ll see you next time.
[00:31:56] Midroll: Did that story feel like it was about you? Do [00:32:00] 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 or visit us at www.privatebankingstrategies.com.
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