It’s a common misconception that the rich become ultra-wealthy because of what they sell. But in actuality, wealth is about ownership. Jeff Bezos didn’t become a billionaire by selling Amazon. He became king of the 1% because he was savvy enough to own Amazon for a long time, and knew that to borrow against his Amazon stock was a much more lucrative tactic than to sell it.

So, how did Bezos know this while you don’t? It’s not because you missed a day at school—it’s because he has access to private banking resources. “Private banking” may sound benign—but once you truly understand what it entails, and break down the literal wealth of opportunities it provides high-net-worth individuals (or HNWIs)—you’ll likely start asking yourself how you, too, can benefit from this hidden advantage.

For far too long, the financial-planning industry has hoarded its secrets, allowing the 1% to build wealth exponentially faster than the rest of us, who are left with only the limited tools offered by traditional brokerages. So, in an effort to level the playing field, we're breaking down what private banking is, the advantages it offers its clients, and how Basic Capital has taken a page from private banking services to build a platform that benefits the masses.

What is private banking?

Private banking, also often called private wealth management, is a term that covers a wide variety of financial services provided to a select clientele. It’s likely that the bank where you hold your checking account or mortgage also has a private-banking division that provides personalized services to HNWI who’ve amassed a treasure trove of liquid assets worth $10+ million.

For the average person, the institution where they manage their assets in an IRA or brokerage investment account is most likely different from where they manage their liabilities (a bank)—but HNWI tend to manage their assets and liabilities all in one place, allowing them to leverage the power of each other to maximize their investments.

What are the advantages of private banking?

While most of us look to tools like IRAs, 401Ks, and real estate to build wealth, high-net-worth individuals work with private bankers to catapult their net worth using privileged financial practices.

Private banking offers a plethora of benefits, such as access to personalized loans and exclusive investments. However, their most-coveted feature is the ability to borrow capital through a favorable structure—secured by their existing assets and arranged on a limited-liability basis—which reduces both the cost and the risk of financing. This well-structured approach not only enables the wealthy to leverage their assets without liquidating them, but also unlocks additional capital to finance the acquisition of even more assets—from art and collectibles to capital commitments at other institutions, such as private equity firms.

Imagine never selling an asset and still seeing your net worth skyrocket

While the rich borrow to invest, the rest of us are stuck in a cycle of borrowing to consume. So the rich get richer, not in spite of it, but precisely because of it.

Why should the rich be the only ones who get to have all the fun? Why can’t the average Joe also borrow at a low cost of capital and on a limited-liability basis to start a wealth-building flywheel?

It’s not some sort of conspiracy meant to keep you out—unfortunately, the reason is far less dramatic and actually quite mundane. Typically, these financing transactions are highly customized and structured for each specific client, which means they require significant resources and a high degree of ongoing operational maintenance (i.e. hours billed by lawyers, trustees, auditors, etc.). As a result, it only made sense for the bank to offer them to clients with a minimum net worth of $5 million.

But the rest of us are catching on—and the private banking industry is losing a grip on its insular practices.

How is Basic Capital private banking for the masses?

While Basic Capital doesn’t offer 1-to-1 private banking services like an FDIC bank, a good portion of our investment model draws inspiration from the tools regularly deployed by private bankers to create a wealth flywheel. Here’s how.

We make it easy to finance investment (not consumption): Financing your investment isn’t something the average investor is able to do without navigating the exclusive world of private banking . Basic Capital changes that. Our standardized, streamlined structure lets you increase your IRA investment fivefold by pairing it with a fixed-term, self-amortizing loan. With a simple, transparent asset structure, we empower clients to snowball their savings while benefiting from the predictability of a term loan.

Protective structure: The ultra-wealthy never take out personal loans. Neither should you! They open limited-liability companies and make them the borrower. This way, they get legal protection from the liability of the debt, while gaining exposure to the upside and limiting exposure to the downside. Basic Capital unlocks the same safe structuring for you by opening an LLC on your behalf that borrows and invests capital. You’re the owner—and you get to reap the benefits.

Favorable rates: Personal loans are expensive because they are unsecured. They’re priced to protect the lender in case the borrower defaults. On the other hand, secured loans are less expensive because they’re backed by real assets that the lender can collect faster in case of default. Because Basic Capital provides your LLC with financing secured by its assets, we’re able to unlock a favorable rate that wouldn’t otherwise be accessible—unless, of course, you have the means to work with a private banker.

Support you can count on: When it comes to finances, no one wants to be left in the dark, wondering what the hell is happening with their money. That's why we're committed to ensuring you feel confident in our practices. As a fiduciary, Basic Capital is held to the same legal standards as a certified financial planner—meaning we prioritize your financial interests and maintain complete transparency regarding your investable assets. Plus, our team is available 24/7 through the app to answer any questions that might be keeping you up at night.

Breaking down the private banking barrier with Basic Capital

While most private wealth management advisors won’t take you on as a client unless you’re a multi-millionaire, with Basic Capital, you can get started with as little as a $1,000 IRA rollover. Start catapulting your savings the same way that the ultra-wealthy have done for years and finally catch a ride on the wealth flywheel.

While Basic Capital unlocks many of the positive features that private banking offers to ultra-wealthy clients, we provide a much lower degree of customization. This is intentional. To make this powerful tool accessible to the masses, we must standardize most aspects of the transaction—making it operational, scalable, and economical. The good news is that there's elegant simplicity in standardization: You get 90% of the benefit without the sky-high cost.

Still not sure Basic Capital is right for you?

We get it. It kind of feels like cheating, but remember, the rich figured out long ago how to make money because of debt—not just in spite of it. We believe you deserve to have access to the same tools—and take advantage of them to the fullest extent. Think of Basic Capital as the everyday investor’s private bank and join our waitlist today.