- Earn 500% more than the cost of a loan, how?
You want to do it using max-funded indexed universal life.
In this educational episode
I'm going to address this question, how do savvy investors,
people who understand money and how it works,
borrow from insurance companies
and actually earn as much as five times
or more than the actual cost of the loan?
Get ready. I'm gonna blow you away.
(bright energetic music)
So I'm Doug Andrew.
I've been a financial strategist
and retirement planning specialist
now for nearly five decades,
and I've helped many thousands of people optimize assets,
minimize tax and empower what I call their authentic wealth.
So a lot of times people ask me questions
because maybe they've read concepts
or heard about them on this YouTube channel
where I have over 1,000 educational videos.
And if you would like to be notified every time
I post a new one, which I do five days a week,
please subscribe.
Maybe you would like to read and study some of my books.
I published 12 books thus far.
At the end of this episode, I'm gonna gift you my 11th book
which will blow you away
and help you understand what I'm about to teach you.
You'll soon learn that one of my favorite financial vehicles
is a max-funded indexed universal life insurance policy.
Structured correctly and funded properly
to be used for living benefits,
to turn into a tax free cash cow.
To where, during my lifetime, since 1980
when they were first introduced by EF Hutton,
I've averaged 9.62% rate of return.
Your money will double every seven and a half years
if you do that.
But ever since indexed universal life came out in 1997,
I've actually averaged 11.17 and netted 10.07,
meaning the cost of the insurance
and all the fees only used one of the percentage points
which is frankly money
that would otherwise go out the window in unnecessary tax,
if I followed the herd and put my money in IRAs or 401(k),
I'd have to be earning 16% in a tax-deferred IRA or 401(k)
to net 10 after taxes in a 33% bracket
and the 1% asset management fees,
I only have to earn 11 net 10 in a max-funded IUL.
So coming back to this.
Savvy investors use max-funded index universal life
'cause they understand how money works.
How do banks, credit unions, insurance companies make money?
Well, if you don't understand this,
there's basically four things you can do with money,
you can spend it, lend it, own with it, or give it away.
See, I actually own and loan on the same assets
and so I won't get into how I manage my real estate equity
on my real estate portfolio or my machinery and equipment
but I actually borrow for those purposes,
maybe at a cost of 4.5% interest borrowing
but it's tax deductible 'cause I do it correctly
and a 33% bracket, it doesn't cost me 4.5%.
Every million I borrow,
I shell out 45,000 a year in interest.
But that's not a foe that's a friend
'cause it's making me money.
That 45,000 is deductible and a 33% bracket
I'm saving 15 grand in tax.
The net cost of 4.5% tax deductible mortgage is only three.
So I pay 30,000 a year in interest
on a million dollar mortgage.
But on my IUL policies I'm making
at least 9%, 90,000 tax free.
And then it compounds.
But the very first year I'm making 90, it only costs me 30.
How much more is 90 than 30?
It's three times. It's 300%.
I often say, would you hire an employee for 30 grand
that made you an extra 90 grand?
Yeah, you're getting a 300% return on the employment cost.
So when people ask the question,
"Well, so how do you use a max-funded IUL
to become your own banker?"
Okay, so let's just say that you accumulate
at least a million dollars inside of an IUL policy.
I have many clients
that have a million, 2 million, 10 million and they get it.
They're savvy investors.
They know how money works.
Now you can extrapolate from this
if you only have 10,000 or 100,000
or if you have 100 million in there.
So if you have a million dollars,
I'm gonna use an actual example
and I have several business owning clients that do this.
They'll borrow a million.
Just recently my son, he had a client
that borrowed a million for two years out of his policy.
The IUL policy wasn't even five years old.
It wasn't even maximum funded yet
but he used it for his business and it was totally tax free.
But he did it the smart way.
What's the smart way?
Well, it's the same way my client did in 2017.
He's a major real estate developer
and he usually will buy properties and develop them
or he'll buy existing properties from people who want out.
So he called me in 2017 and he said,
"Doug, I need a million bucks."
See, he used his IUL as working capital.
And so he said, I need a million dollars
to tie up a piece of property for an earnest money.
How soon do you need it?
Oh, he said, "I don't need it in 24 hours
but by the end of the week would be great."
And so I said, "Okay, I'll email you the form."
He knows the form, it's one page.
He puts his name and his policy number
and then it simply asks, okay, "How much money do you want?"
A million.
"Do you want to withdraw a million?"
He doesn't check that box.
Why?
If he withdrew a million out of his money,
he's no longer in their earning interest.
Okay?
So he does it the smart way.
I wanna borrow a million from you, Mr. Insurance Company
and I want my million to stay there earning interest.
Okay, well there's two ways to borrow.
There's the zero cost or zero wash loan
where you can borrow the million.
They'll charge you, let's say 2%,
but then they credit the million
that is collateralizing that loan the same 2%,
they charge you 20, they credit you 20,000, okay?
It doesn't cost you anything but it's tax free
because you don't pay income tax on loan proceeds.
It's tax free and then he doesn't have to put it back.
He keeps earning compound interest tax free at 2%.
It keeps getting accruing at 2%, but it's a zero wash, okay.
But he can pay it back when he wants.
If he withdraws his money,
he can't put the money back into there.
So that's why it's the smart way.
Now, he didn't choose that option.
What's the last option?
Would you like an index loan?
Absolutely! That's what I do.
What's an index loan?
That's where the insurance company does not take the million
and carve it out and credit you 2%
and charge you 2% on the loan.
That means, that the insurance company
is gonna keep the million
and maybe, you know, at the time he had 3 or 4 million,
he only needed a million of his 3 or 4 million
that was in his IUL policy.
He wants all of his money
to be earning the indexed rate linked to the market
where he's averaging 11 and netting 10, okay?
So he wants to keep earning 10% net
on all of his money.
He doesn't wanna million of it not to earn that
and only earn 2%.
Does this make sense?
So in order to do that, the insurance company
has to charge him a higher interest rate.
So he agreed to that, which was 5% in 2017.
So they loaned him a million.
The insurance company loaned him a million dollars
but it was collateralized by a million
of his 3 or 4 million of cash value.
But he has his whole 3 or 4 million continuing
to earn 11% netting 10 are you getting it?
That year, the million that he borrowed,
he turned into 3 million buying, fixing up
and flipping an apartment complex.
But while he was using technically his money,
it was really the insurance company's money
but it was really his money.
It was still in their earning interest.
That year he capped out and they credited him 25%
on that million dollars, 250 grand.
So if you do the math, he was credited 250,000 tax free
on the million that he used as collateral.
If you subtract the 50,000 of the interest,
he netted 20% or 200 grand tax free on his million
while he was using it to make 3 million, buying
and flipping real estate.
He uses max-funded IUL as a working capital account
'cause he understands how money works.
He was making 500% more than the cost
of the loan on his IUL.
This is how you can make five times more
than the cost of a loan.
Frankly, there have been times
where we've had clients borrow at 5%
and earn 61% on their IUL.
Like, during Covid-19, March of 2020 to March of 2021,
when we told our clients
to link to a one year point-to-point with no cap
and they got credited 61%.
Folks, this is a no brainer.
If you want to understand how to do what savvy investors do
become your own banker.
I would recommend you study how to do this.
And in my book "The Laser Fund," it's my 11th book,
it's been flying off of our warehouse shelves.
You can get this 300 page book,
which is actually two books in one.
This side is about 200 pages, 14 chapters
for the left brain learner,
with all the charts and graphs and explanations.
If you're more of a right brain learner,
you learn by stories and examples,
you flip over and read this book.
This is about 100 pages, 12 chapters
with 62 actual client stories.
If you wanna use your whole brain
you can read the left brain and the right brain.
But if you go to Amazon,
these are $20, plus you pay shipping and handling.
If you do that, thank you.
But I'll gift you a copy free.
To claim your free copy,
simply go to Laser Fund, laserfund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling.
I require some skin in the game, but I'll pay for the book.
I'll fire out a hard copy
to you via priority mail the next day.
But while you're in there claiming your free copy
if you like to listen and learn, watch and learn,
check out the audio and video formats.
You can also register for a free educational webinar,
which we teach on a regular basis.
You can even schedule an appointment
to talk to an IUL specialist that I mentor and oversee
and with no cost or obligation
they can create some hypothetical illustrations
with your numbers to see how to structure this correctly,
so that you can earn 11 and net 10.
Because if you go to any insurance agent that says,
"Oh, I sell IUL."
You may be in danger of only earning seven and netting four
'cause they didn't know how to structure it right.
So I would recommend you go to an IUL Insider,
which is the name of the coalition or network
of 1,000 agents that invest time, energy and money
to know that they're doing it correctly
and they're being mentored how to do it right.
This is about you and your serious cash
and I don't want you to jeopardize your serious cash.
(bright energetic music)