[00:00:00] Voiceover: Welcome to Private Banking Strategies Podcast with Vance Lowe and Seth Hicks, your secret weapon to protect your assets and never have to start over financially again. Vance and Seth help high net worth individuals, families, business owners, and investors, structure and asset protected Tax-free fortress for their families.
[00:00:21] 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 on to the show.
[00:00:49] Aric Johnson: Hello and welcome to Private Banking Strategies with Vance Lowe and Seth Hicks. Seth, what’s going on?
[00:00:55] Seth Hicks: Hey, Aric, glad to be here, man. We’re excited about another podcast.
[00:00:59] Aric Johnson: [00:01:00] Yeah Absolutely. We are kind of continuing from the last podcast. Not that it’s in conjunction with it, but if you haven’t heard the last podcast, go listen to that great information, especially right now.
[00:01:09] It’s very timely and Vance said that. And then Vance gave us a sneak preview of this podcast. And Vance, why don’t you tell us what we’re talking about today?
[00:01:17] Vance Lowe: Well Aric, it’s great to be here. I’m really excited about the idea here because this is a culmination of everything. What would’ve happened if we set up the strategy in our family and we did it right for a full generation.
[00:01:33] So we’re gonna discuss that today and take a walk. We’re gonna use Nelson Nash’s book, becoming Your Own Banker. If any of our readers have that then they can follow along. We encourage people to get that book as well as our own. We’ll talk about that towards the end of the podcast. But this information is found in the fifth edition.
[00:01:55] Which is the main book you can give Becoming your Own Banker [00:02:00] on page 71 through 74. that’s what we’re gonna talk about, to introduce it, maybe the topic is, the very first thing he does is he introduces the concept of age classes. He does a great job in us understanding this in the book, and we’re not gonna take that time other than to come up with the classifications.
[00:02:24] We just need to relate it to family generations. So he says a generation is a specific amount of time. The concept it’s really simple to follow when you read it. . So we wanna be able to do that. And it’s a system for the family to prosper over the long haul and it teaches a lot of concepts.
[00:02:46] Aric, how long do you think a generation is?
[00:02:48] Aric Johnson: I thought a generation was like 40 years. Is that right or not?
[00:02:51] Vance Lowe: I thought that, but then I thought I’ve heard 10. But Nelson’s defining a generation as a period of time of [00:03:00] 22 years, okay? And he divides that 22 years over a lifespan.
[00:03:05] And it’s ingenious what you come up with, and I think he’s right on where he gets his information. I’m not really sure, but it is incredible. I need to give you a little bit of history here. And Seth, you can add in on this Nelson R. Nash, educated himself into forest. In the tree business now everybody knows it takes a long time for a tree to grow from a sapling all the way up to get mature to be harvested.
[00:03:36] It’s a 40 year process and his family had a 400 acres of heavily timbered forest and they split it off in 40 sections. And then they did something every single year to one section of the trade. And you can read this, in his book, but this is where he got the ideas [00:04:00] of how to set things like
[00:04:02] the Perpetual Banking strategy that’s in his book.
[00:04:06] So we want to get to that. What have I missed? Seth on Nelson’s history. Is there anything else we wanna pull out right here?
[00:04:15] Seth Hicks: No, I don’t think so. I I think we’re your land foundation for how successive generation flow works, and we touched on that in the last podcast a little bit with trust ownership of policies and the trusteeship.
[00:04:28] So like Aric had said, it’d be really good to listen to that podcast in conjunction with this one and put those two pieces together.
[00:04:36] Vance Lowe: together. All right, I guess we could identify the age the generational age group. I think he goes from zero to 22, 22 to 44, 44 to 66, and 66 to 88. That’s a full life expectancy.
[00:04:55] And so there is something to do in each of those [00:05:00] generations. And so we’re gonna start on the back end. He says to take the retirees because they’re the ones who can most afford the premiums. And he makes a suggestion that the retired grandparents purchase life insurance on the newborn grandchildren.
[00:05:20] And there’s reasons for that and we’ll get in towards that on the back end. And he illustrates it here in his book by paying on a newborn child, $2,000 in annualized premium for a total of 22 years, and then stop completely. . So the book shows $44,000 a premium. But Folks, the illustration.
[00:05:44] Now all companies are a little bit different and you know, when you do these calculations on your own you’ll come up with your own results. But what we’re after here is the strategy and the longevity of why he does this.
[00:05:56] It’s always been said that [00:06:00] 15% of the effort Generates 85% of the results, but it’s always the last 15% of effort that generates 85% of the results. It’s always the last year that generates the most growth, right? If we retire at age 70 and we’ve had a policy on us for 70 years, do you have any idea what possibly could happen?
[00:06:25] Well, We’re gonna show you here today. in this case and in the book, and you can back this up at age 70, there is $4,104,852 of cash value available. Wow. and they did nothing except pay the premium. And waited until age 70. So there’s reason for this. We’re gonna walk into that. So when that person is 70, he will be able to tap into that as a retirement income [00:07:00] of $225,000 a year for the rest of their lives.
[00:07:06] and say they die at 85 or whatever it is. It actually gets bigger the more they use it. But at age 85, they’ll still pass tax-free in death benefit $6,375,000. Wow. This is because of the longevity. None of us really can appreciate that anymore because we’ve lost That stewardship even the meaning of stewardship because, we want everything now today and whatever.
[00:07:42] But what’s really interesting is that during that time, he’ll have gotten that $44,000 back plus an additional 3.556 million that he had been able to take out income tax. . So this is why [00:08:00] we’re introducing this concept that where the policies should be placed. There has to be a beginning there. There has to be a start, and we’re gonna start that with the grandparents.
[00:08:10] They’re gonna do it on their own lives, but they’re gonna make sure that all the grandkids have a policy. And that was my goal when I understood this. And Nelson literally, As I think about it may have twisted my arm cuz he checked up on me and asked me, have you gotten policies now on all your grandkids?
[00:08:31] I couldn’t appreciate what he was saying at the time. Now let’s go back. Remember in Nelson Nash’s book or our podcasts. What would happen if we financed cars? Seth, talk to us a little bit about if we used this along the way to finance cars. . Sure.
[00:08:49] Seth Hicks: We’ve compared financing a car through your private banking system versus financing a car in some other means, whether it’s some low rate offer from [00:09:00] the car dealership or your local credit union, or whatever the case may be.
[00:09:04] And at the end of those lifetimes of the loan the person. Finances through their private banking system has the car obviously, which is depreciated to a certain value, but they’ve also got all their cash back into their policy, which every payment has directly increased their ability to use the dollar again.
[00:09:26] For example we’ve got some auto financing podcasts that you can drill down on. But someone who finances it with a third party, all they’ve got is the value of the car depreciated. If I was a $50,000 car and at the end of seven years it’s worth 15, they’ve got $15,000 in value and they’ve burned all the money that they paid to the third party financing entity, and they’ve lost all the interests, whereas the person in the banking system has recaptured every.
[00:09:54] Dollar and they’ve also created a growth and a tax-free [00:10:00] increase within their banking system so that they have the $50,000 plus interest plus compounding growth over those seven years. We could probably call it sixty sixty five conservatively. Plus the $15,000 value of the car. So let’s call it $75 to $85,000 in total value using your private banking system versus $15,000 with a with a depreciated car.
[00:10:26] So th those are the, that’s the comparison. yeah, I was gonna drive this home a little bit further with regards to the compounding nature of the cash value in these policies, in the illustrations that you’re describing in Nelson Nash’s book, pages 71 to 74 where you’ve illustrated the at.
[00:10:46] Age 70. There you’ve got a total value of 4 million $104,852 in cash value at age 70. If you dial that back 10 years you’ve got 1.9 [00:11:00] million in cash value dial that back to age 50. You’ve only got $860,000. Dial that back to age 40. and you’ve only got $380,000. So the compounding nature, a as we illustrate in our book that you can get on our website, what the banks don’t want you to know, the compounding nature of this cash value is really goes parabolic the longer you let it marinate, so to speak.
[00:11:28] So you go from, 380,000 to 860,000. To 1.9 million to 4.1 million uh, in each decade. And and of course, like you’re discussing now, they, this person can access the cash value to finance. Cars to finance, education to finance or acquire a rental property or some other type of investment, and that cash value is only gonna increase because you’re cycling each payment back [00:12:00] into your own banking system.
[00:12:02] So you’re not paying a third party and losing control of that money forever. You’re actually recycling it back into a tax-free compounding environment.
[00:12:11] Vance Lowe: Yeah. Plus you’re gaining all the interest. Exactly. Oh yeah. This is it. It is so amazing. We tell people, listen, you can’t compete with somebody who has the banking equation.
[00:12:25] Dollar for dollar investment for investment if you ignore the banking equation. You can’t accomplish all the potential that’s out there to be had. And so this is why these are the little tidbits and little bits of information in our podcast that we want to provide people. Think about education, think about mortgages.
[00:12:48] Seth is, way back along that line. There’s enough money to start financing everything isn’t there? Of course. and this is just one contract. I have 10 grandkids, okay? And they’re coming up [00:13:00] through these generations. I’ve used cash from their policies, I own them.
[00:13:07] I am the beneficiary and I’ve dipped into those. I actually did what’s called laddering, and that’s another topic, but I used one policy to pay the premium on the next and all the way down the line. And then when my windfalls would come in, I would pay all the loans off, with all the interest and everything else, and charge myself good, healthy interest.
[00:13:28] All taxed advantaged. So incidentally, I want our audience to know inside of these type of environments, you do not trigger taxable events. So everything in this podcast today and Nelson’s illustration, he avoids triggering any taxable events. As we get the first generation up in age 22, they’re now educated, they’re now in the workforce, and they’re going forward.
[00:13:59] [00:14:00] They’re gonna be borrowing money hopefully, from within the system, but they’re going to start their own contracts, hopefully, and they’re gonna learn the system. as they get older, they’re gonna learn, where’s the money coming from? Family has a trust or family has a banking system. I’m supposed to go there to get my car financing.
[00:14:22] that’s where I went to get my schooling education for my toys or whatever else. And I pay back to the family bank. And now I’m being told I should have one of these contracts on myself so that I can You know, Use it as well. So you’re gonna see here that this is a education for the family members.
[00:14:42] Seth pointed out a probably in, in an earlier podcast, you’re gonna have family members that don’t want to have anything to do with money, right? Seth? That’s, that happens. There’s gonna be family members that are the black sheep of the family. For some [00:15:00] reason, I mean, we love them to death, and then like even in my family, there are family members who are much smarter than I am about money and won’t touch the family banking system.
[00:15:11] 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 at (817) 200-4777 or visit us at www. Private banking strategies.com.
[00:15:43] So you know, it is what it is, but the concept still works. Even though I have a son with four kids refusing into the banking, he allowed me to put policies on the kids. And if you read our little [00:16:00] ebook it was one of his sons that I financed as 10 year old son’s bicycle and taught him how to do this
[00:16:06] Anyway, so let’s continue here. So we’ve got this for 22 years, we stopped premium. Okay, that makes the older generation. Over that 22 years now they’ve been paying those premiums and now they’re at the end of their life cycle. So death benefits are gonna be coming in. Now, how are those death benefits going to be handled?
[00:16:30] Well, There’s 22 more years. So the 22 year olds, will be 22 or 30. They’re getting married, they’re having their own children and those death benefits from The seniors from the retirees come in and they replenish all the policy loans. They fill ’em up and they buy contracts on all the new generation that are being born.
[00:16:57] And until [00:17:00] that money is put to work. So that’s, that’s part of the cycle. as each generation becomes grandparents, they buy life insurance on their grandkids. Now, there’s a significant advantags to what he’s saying Here we are, just outlining this lesson in his book.
[00:17:21] But I want to cover a lot of the advantages and uh, Aric and Seth jump in here, maybe with an illustration or something as we go along. The first one is it covers multi-generations. Four, in the 22 year generation bracket, and it promotes long-term planning. I don’t know any place in the United States where we teach. [00:17:47] Our posterity, our kids, what long-term planning is anymore. Everything is about today and it’s about short-term. This, you definitely go through it. Who’s [00:18:00] the very easiest person to get through underwriting? And at what age, Aric, would you think?
[00:18:05] Aric Johnson: Newborn.
[00:18:06] Vance Lowe: Absolutely.
[00:18:07] Aric Johnson: gotta be . They haven’t done anything wrong yet,
[00:18:10] Vance Lowe: so why not insure ’em?
[00:18:12] They will have more insurance than they could ever qualify, by the time they retire. See that we run into the insurability limits a lot. Now we have strategies to deal with that with our clients coming in. But you can only qualify for X amount of death benefit. And $2,000 a year, a newborn, they can easily qualify for that.
[00:18:34] But, you know, to have 10 plus million dollars of death benefit at retirement, and maybe more than that when they die. , that’s more than they can qualify. A retired person can’t qualify for near as much as it, because it isn’t based on assets anymore. It’s only based on income. So that’s important.
[00:18:58] So they’re [00:19:00] much easier to get through underwriting. It’s completely a tax-free buildup over that long-term period of time. Seth, you just convinced us that the compounding effects $44,000 turns into 4 million plus dollars at age 70.
[00:19:17] Seth Hicks: It’s really hard to conceptualize until you look at some of the illustrations.
[00:19:22] So we encourage folks to take a look at becoming Your Own Banker by Nelson Nash and looking through these illustrations and actually even digging into some of the prior podcasts where we talk about the twin sisters and Paul Bunyan with equipment financing and how these things compound. And a funny story that we’ve told that bear’s repetition.
[00:19:43] Aric Vance, when he and I initially met each other and he tasked me with. Problem of compounding a penny. Doubling a penny every day for 30 days, and how it would come to over $5 million dollars. And so I started doing the math in my head and he, patiently [00:20:00] played along and I was about day 15.
[00:20:01] I’m like, Vance, We’re, this is not gonna reach $5 million. And he just chuckled and said, keep doing the math. So I kept doing the math and by about day 23 or 24, the light bulb came on and I’m like, wow, this is going to reach $5 million. Yeah. With simply compounding a penny over 30 days. Investments don’t double every day, but this is the same.
[00:20:22] The nature of compounding interest. Albert Einstein called the eighth Wonder of the world. It’s a powerful tool .
[00:20:28] Vance Lowe: It just really is, and you have to appreciate it. So in, in here I hope we can build an appreciation to not procrastinate because in this what we’re talking about, if we waited five years, if we waited for that trial to be five years uh, Seth, on the illustration, go back five years and find out what the cash value would be on the illustration.
[00:20:52] Seth Hicks: well, you’ve got, you’re talking about five years into the policy. So policy year five.
[00:20:58] Vance Lowe: No, go [00:21:00] to age 70. Go to age 65. And what’s the cash value?
[00:21:03] 65. [00:21:04] Seth Hicks: Cash value, 2.8 million.
[00:21:07] Vance Lowe: So 50% folks, almost 50% if you procrastinate five years. if you wait five years to start when you’re 70, you’ll only be at two point something million dollars.
[00:21:22] That’s what I’m trying to get at. Procrastination is definitely not your friend. You’re always gonna have year one, but you’re never gonna have year 70 if you procrastinate a year. well, I guess you could, but it’d take you to a full 70 years to get 70 years worth of value. You’re not gonna get it at retirement or at your birthdate 70, which tells us the outlay is very small compared to the ultimate yield.
[00:21:52] You can all, in the stock, theoretically, you know, they can do average rates of return, which we [00:22:00] don’t trust could get you there, but in reality it’s not. Um, This is the only safe haven that I know that will not only pay. A guaranteed rate of return every single day. No matter what the economy does, no matter what the market does, you’re going to get an increase in value in these accounts every single day.
[00:22:26] And in addition to that, you’re gonna make your share of the profits from the insurance company because you are an owner of the life insurance company. A tremendous opportunity here, there’s so much advertisement against it that the masses think they know better. Number uh, six, when death benefits occur, the system becomes self-sustaining.
[00:22:52] So literally no. No more premiums even have to be generated out of current income. [00:23:00] Now, it should theoretically to grow it more and more, but the premiums can be paid from the death benefits. On all the existing policies, I like to use a trust and say the trust owns it. So if the circumstance is right and they use a trust, all that money is there.
[00:23:20] It purchases the policies, it pays the premium, it stops premium when it’s the right time, it pays out the retirement income and people borrow money from it. So family members have to run the family bank.
[00:23:33] It precludes any need of social security. We’re all programmed that we have entitlements, which we don’t. Our birth certificates do not entitle us to anything in life, but the government tries to brainwash us that we do, and one of them is what I call a Ponzi game called Social Security, and we have a right there and they take taxes and use it for [00:24:00] other things, and we don’t even have to worry about that in our own system.
[00:24:04] Provides passive income. That is assured. It’s not a hope, it’s not a wish. It’s something that you can count on in the future where you count on almost any other investment. Estate planning is simplified. Seth, what’s the problem today about estate planning and why? Why is it simplified with. Well, You’ve got estate taxes
[00:24:29] Seth Hicks: And we’ve, talked about a gentleman that passed that had a very vast estate.
[00:24:35] The artist, formerly known as Prince, had a 200, 200 million estate. And when he passed he had no real estate plan, nothing like a private banking system in place. And of his 200 million in assets he lost or his beneficiaries. Lost over a hundred million. So the state of Minnesota and the federal government took more than half.
[00:24:57] And whereas if you had it properly planned, [00:25:00] such as in this type of strategy, there’s no tax on the death benefits that are paid to the beneficiaries. There’s no tax when you. Take money out as a retirement strategy. Like in the illustration of what we’re talking about with the gentleman taking almost a quarter million dollars out at age 70 of the four point 1 million in cash value.
[00:25:20] He can take that out for the rest of his life and there’s no tax implication unlike. Other government qualified or sponsored plans, IRAs and 401ks and 403 . You’re paying taxes on all that. And you’ve got penalties. Penalties if you take it out too soon, if you take it out too late and the laws can change and the taxes can change, whereas this.
[00:25:42] Is carved out from taxation pursuant to internal revenue code 7702. And we’ve said this many times, the politically elite, the rich and the ultra rich, they all take advantage of this. And that’s why the laws on 7702 aren’t changing. [00:26:00] They’re gonna be there and you’re gonna be able to implement this in a tax-free environment. [00:26:04] Because uh, everyone else making the laws and know the loopholes, they take advantage of this.
[00:26:10] Vance Lowe: Right, right, right. Thank you so much. The implication here, remember we said in running this strategy correctly, you trigger no taxable events. The other way Uncle Sam wants to be, in your house, in your private life.
[00:26:26] I mean, They are all around us right now. They, everything we do seems like they can listen in on, but in this strategy, they’re left out. They don’t know what’s going on. They don’t need to know. You’re not triggering event, you’re not crossing any lines, you’re not in any gray areas. You’re just not triggering a taxable event, which leads us to our next one and, and this.
[00:26:52] Kind of the purpose here that we’re trying to get to wealth and, and he’s got emphasized mentally [00:27:00] is transferred to the succeeding generation over a long period of time to produce consistent understanding. They are learning a process and not buying a product. This is a process, a way of life.
[00:27:18] This is the way we conduct life. Okay. And then the last one, it promotes the understanding of what stewardship is all about. Aric, what’s your definition of stewardship?
[00:27:33] Aric Johnson: that’s a broad question, but for me, it’s doing the right thing with the money that I have to better my family my community and life in general.
[00:27:44] Vance Lowe: Okay. Seth, have you got a definition for that?
[00:27:48] Seth Hicks: Sure. I think it’s, you know, maintaining accountability and control over what you’ve been given in a financially responsible way and in a way that benefits others.
[00:27:59] Vance Lowe: [00:28:00] Perfect. In my life, I have been a steward over hundreds and hundreds of families, retirement incomes.
[00:28:12] And I am responsible and accountable for the actions taken to reach the goals that are set and the expectations that are there. That to me is what a steward needs to be. Take that accountability, take that responsibility, but to get the job done. money won’t buy happiness, but a poor stewardship of money will still happiness.
[00:28:43] . So I hope we’ve been able to open up an idea for everybody. Our listeners here, that this is a perpetual thing. You can change the future of your family if your family is middle [00:29:00] class struggling. It doesn’t have to be that way. You have the opportunity, unless we become a communist country or something, and I don’t want to go there.
[00:29:10] You have the opportunity to write your own ticket. I have studied as far as I could before they went private, the Rockefeller family and this pretty much is The outline that he introduced, he did not introduce it to his family till after his death. And then he had a trustee introduce it to his family and made his kids run it or they would lose it.
[00:29:41] He had charities and everything all picked out that would get the money. If his kids rebelled and wanted to just cash it out, they couldn’t do that. And part of the motto of the family was, keep the money in the family. Well, Isn’t this a perfect way to do that? If we borrow and [00:30:00] consume, but pay back to our own system, the money returns back to us instead of someone else’s.
Aric Johnson: [00:30:06] Yeah,
Vance Lowe: [00:30:08] so I’m hoping that our goal for today is reach and that people will take the next step.
[00:30:15] Aric Johnson: Speaking of that next step, where do they find more information?
[00:30:19] Seth Hicks: People can find us@privatebankingstrategies.com. That’s private banking strategies.com. And on our website, you’ve got valuable resources and tools to learn more about the system one of which is a free book we offer our guests called What the Banks Don’t Want You to know.
[00:30:38] And you get that for free and you can read it or you can listen to it and audio download. and thereafter you are gonna be subscribed to our email list if you want to be where we spot various issues and and current issues and retirement issues, and we bring valuable content to folks where they can continue to learn.
[00:30:58] And on our website, Aric, you [00:31:00] can hear all of our podcasts that we’ve produced. You can read blogs and. And really binge on content until you’re ready to take the next step. And that next step is scheduling a call with Vance, where you go through an exploratory process and begin to lay out some motivations and a roadmap.
[00:31:18] And ultimately you’ll have some follow up calls if you travel on down this road with us, where you put in your financial information into a A proprietary system that Vance puts out an eight year analysis, and that’s a detailed roadmap of how this, the system will work for you with your current financial situations, how you can get out of debt, pay debt if you’re in debt, or how to best utilize the system and how to build your wealth with private banking strategies.
[00:31:46] So that’s process.
[00:31:47] Aric Johnson: the process. Fantastic. Gentlemen, thank you so much for your time today. This has been again, extremely beneficial.
Vance Lowe: Thanks, Aric. Yeah, thank you so much. It’s been a pleasure.
Aric Johnson: You bet. And of course, our last [00:32:00] thank you always goes to you listening. Audience, thank you so much for tuning in and listening to the Private Banking Strategies podcast with Vance Lowe and Seth Hicks.
[00:32:06] 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 and we humbly ask that you to share this podcast. Rate it and leave a review is this actually does help others find the show.
[00:32:20] Again, thank you so much for listening today. For everyone at Private Banking Strategies, this is Aric Johnson reminding you to live your best day every day, and we’ll see you next time.
Voiceover: [00:32:35] Did that story feel like it was about you? Do you feel you should be making more progress toward your financial? If 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 [00:33:00] www.privatebankingstrategies.com.
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[00:33:22] The content has been made available for informational and educational purposes. The content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.
