The number one cause of home foreclosures in America is lack of emergency funds. In this
episode, I'm going to address the question "Why should creating an emergency fund be a top
priority?" If you don't understand this but I'm going to share with you where you should put
an emergency fund. And it's not in a bank or a credit union with a drive-up window.
So, my name is Doug Andrew and I've been a financial strategist and retirement planning
specialist for 4 and a half decades. But in 2005, after having 3,000 clients in 13 western states,
I actually decided to let all my professional licenses automatically expire at the end of that
year to become a consumer advocate, to educate. I started a national radio show. I did TB, I
now have this YouTube channel. And my passion is to educate and empower you. Because I'm fine. In
fact, I actually trained over 3,000 CPAs, tax attorneys and financial advisors from 2003 to
2007. But I realized a lot of them were not taking the time to educate their clients. They would say,
"You know, Doug, we don't have time to educate people like you do. So,
what the public doesn't know won't hurt them." No. See, the reason they came is because
none of our clients lost a dime in 2001 to 2003 after the terrorist attacks.
Most Americans who had their money in IRAs and 401(k)s in the market lost 40%. And it took 4
years till 2007 to make it back. In that 7 years, a lot of our clients doubled their money. If they
had a million in the year 2000, they had 2 million in 2007, December. Then what happened in 2008?
As Warren Buffett put it. He said, "When the tide went out in 2008, it revealed who was swimming
naked." What did he mean? A lot of people didn't think that would happen again and people lost
40% again in one single year. And it took 4 years until 2012 to make it back. In that time period,
many of our clients had 3 million for the million they started with. Most Americans were barely back
to break even. So, when we talk about how to create an emergency fund, people think,
"Well, I need an emergency fund over here and that is not commingled with my retirement account
or this money over here." And I'm going, "No, no. My emergency fund is the same fund that I
use for real estate management business working capital, for retirement, for college funding for
my kids. It accumulates tax-free." -"Well, wait a minute. If you if you touch your IRAs and 401(k)s
,there's a 10% penalty." -"I didn't say IRAs and 401(k)s." -"Well, what else is tax-free?"
-"The Laser Fund." The laser fund is like a financial swiss army knife.
Let me tell you why. So, before I tell you about this financial swiss army knife, if you know
anybody who is wondering "How much should I suck away in an emergency fund and where should I put
that money?", share this video, okay? Subscribe. And I have several other related educational
videos that will help you understand the best place to accumulate money for emergencies,
lump sums, retirement, college funding. I use the same vehicle and it's called the Laser Fund.
Because why would you put money for emergencies in a bank or credit union? And people say, "Well,
because it's liquid." See, they confuse liquidity with convenience. Well, what do
you mean by liquidity? Well, I can just go down to the drive-up window and I can ask for my money out
of the bank. And so, you have your money in there and you think that's liquidity because they have a
drive-up window? And they give you some suckers for your kids. You know how much that's costing
you? Do you know in a true emergency in America that if the country really got into trouble
banks can say sorry and not give you your money for 6 months? Where do banks put your money for
liquidity? Where do they put the money you deposit into them so that it's available to them in the
event of a run on the bank or an emergency? Would you like to know? Here's the insight:
In 2008, there were 400 banks that went under. 900 more were on the watch list on the brink
of going under. So, the federal government asked the 5 major banks in America to disclose
where they had their tier-one assets for liquidity and safety in case of a financial run on the
banks. Because most Americans have no clue how close we were to a total financial collapse.
Guess where the 5 major banks have 30 to 40 percent of their tier one assets for
liquidity and safety for emergencies? In BOLI, (b-o-l-i) stands for bank-owned life insurance.
What? On who? Doesn't matter. They're the owner of insurance policies on their board of directors,
stockholders, they buy... They put money into insurance companies. Why? Because the
multi-trillion dollar insurance industry is the backbone of America and the backbone of the world.
One insurance company where I put some of my money manages 3 trillion dollars. Do you
know how much money that is? That's as much as the IRS collects in taxes in an entire year.
This is where the government goes for help when they need money. Banks borrow our money and pay
us 1% interest. Every million they borrow, they pay 10,000 a year. And where do they
put it? Into insurance companies that are usually ranked 6 notches higher in safety than they are.
Most banks average maybe triple b ratings with S&P. Most legal reserve insurance companies are
rated triple A. That's 6 notches higher in safety. They take our money (opm) other people's money,
they pay us 1% and they turn around and put a lot of that into institutions rank 6 notches higher in
safety. They increase the safety. And the insurance company is paying them 4 or 5
percent without even linking to an index. How much more is 4% than 1%? Don't say t3.
On every million, they borrow from us at 10 grand, they're making 40 grand. Sounds like a pretty good
deal. Would you hire an employee for 10 grand that made you an extra 40 or 50 thousand? This
is where banks and credit unions put their money for emergencies. If you're connecting the dots,
what I'm actually saying here: Bypass the middle man. For emergency funds, why would you put it in
the bank when the bank is taking your money and increasing the safety and liquidity by putting it
over here. Why not just bypass the middleman? The actual fact is in a real emergency, I can access
my money with an electronic funds transfer or a phone call. See, the insurance industry is the
backbone of America. They have liquidity in the great depression. Do you know how many banks went
under, okay? Well, banks basically closed. 40% never reopened again. Some real estate dropped
80%. Guess how many legal reserve insurance companies went under in the great depression?
Zero. They came through paying 2, 2.5, 3 percent. And in 2008, guess how many legal
reserve insurance companies went under? Zero. So, take a lesson about what I'm saying here.
If you want to establish an emergency fund, I would recommend you have one in the safest
repository earning a rate of return 2 or 3 hundred percent greater than the 1% the bank pays you
and you can actually access your money with an electronic fund transfer phone call. You don't
need a drive-up window. Hello? And you can have tax-free accumulation. So, let me give you some
stories of how this works. So, on this channel, Three-Dimensional Wealth, I share a lot of
insights and educational videos about people who thought they were doing the smart thing by maybe
trying to get their house paid off by sending extra principal payments to the mortgage company.
Or business owners, they're trying to run their business and get rid of this and that and they
don't have any liquidity. Folks, I recommend that you have emergency funds of at least 6 months,
preferably more like 9 months to 12 months of whatever you would normally need an income to buy
gas and groceries and so forth. And so, let's say if push came to shove and you tightened your belt,
you could get by on 5,000 a month. You would need 60,000 (that's 12 times 50,000
in an emergency fund). Sometimes people think, "Well, okay. That's
that's a separate account. That's my emergency fund." No. I can have 60,000 in my laser fund.
And I'm earning 6, 7, 8, 9, 10 percent average tax-free rates of return. But it's also my same
fund or my diversified portfolio. I have several laser funds for college funding for my kids and
grandkids. It's my retirement account. It's my emergency account. It's also for my real estate
management, my business working capital. It's like a swiss army knife. I can use it for anything.
And so, it's so liquid there's no penalty. I can tap into it. I don't have to wait till
I'm 59 and a half to avoid a 10% penalty. Hello? So, if this is intriguing you and you're going,
"What's a laser fund!?" I'm going to show you how you can learn what it is but more importantly
what it does and how you can have this versatility. Because oft times, I have
asked audiences. And it's mixed, men and women. "How many uses are there for baking soda?"
And people blurt out. "Well, it takes the odor out of the refrigerator. I soak in the tub. It takes
the pop out of a pot of beans." And finally somebody goes, "Oh, it's good for baking."
The obvious. They say, "Well, what's your point?" My favorite vehicle The Laser Fund is
maximum funded life insurance. Most people think life insurance is for death. Hello? It's for
living benefits. It's for all these goals I've been talking about people say, "Life insurance?"
My average return on my maximum funded insurance contracts which I call the laser fund because
it's how you structure it and fund it will knock the socks off of any IRA or 401k. I earn rates
of return between 6 to 10 percent average. But some years, I've earned a size 55%. But I don't
lose when the market goes down. It eliminates the dangers of taxes, inflation, and market volatility
because it's tax-free. Inflation helps me instead of hinders me because I link my returns to the
things that inflate. And when the market goes up, I get to benefit. When the market goes down,
I don't lose. Are you intrigued? Let me show you how you can learn more about what I call
the laser fund. So, The Laser Fund... I've written a book. This is my 11th book. It's been flying off
the shelves. We're in are in 6th printing. It retails for 20 bucks but I'm going to gift you
a copy for free. I'm going to share with you how to claim your free copy. But with The Laser Fund,
there's 200 pages in here of charge, graphs, and explanations. But when you flip the book over and
read this side, this has 62 actual client stories of how the laser fund is the dream solution
for retirement which most people use it for, tax-free retirement and why people
don't outlive their money here compared to money in IRAs and 401(k)s. But also college funding,
business working capital. But emergency funds, when you reach stories in here, you know how
many times I have dipped into my portfolio of laser funds (because you can have more than one)
and I've been able to access money in 24 hours. 80 thousand, 200 thousand dollars. Is there
an IRS penalty? No. There's no 10% penalty. I access the money. In fact, I borrow it out at 5%
and I keep earning 10%. Did you hear that? I don't even have to withdraw the money. I can use it as
collateral to borrow at 5 and I keep earning 10. How much more is 10 than 5? I make $50,000
on my million that I borrowed out while I'm using it for something else because I had an emergency.
You have no idea how powerful this concept is. So, if you want to be savvy like a lot of people who
are multi-millionaires, you want to become your own banker. Learn how to do it with the Laser
Fund. If you go to laserfund.com (LASERfund.com), you contribute a nominal amount towards the
shipping and handling and I'll cover the rest of that cost. And I will pay for the book and fire it
out to you. Subscribe to this channel. Search some of the other topics related to this one. Watch
maybe this one next and you'll learn more about how the laser fund is like a swiss army knife
that can be a dream solution for all kinds of financial goals and double as your emergency fund.