- What does LASER stand for?
In this episode, I'm going to address
that most places where people invest
fail the "LASER" test.
I'll explain what that is
and how you can choose the right vehicles
for your long-term goals to put your serious cash
into money that you do not wanna jeopardize or lose.
(tranquil pop music)
So I'm Doug Andrew.
I've been a financial strategist
and retirement planning specialist now
for north of 48 years, helping people optimize assets,
minimize taxes and empower, what I call
their authentic wealth.
And I've been very blessed in my life to have authored,
thus far, 12 books, I'm working on my 13th.
But my 11th book is titled "The LASER Fund"
because of this acronym that I came up with years ago,
L-A-S-E-R, LASER focus.
And LASER, as an acronym, stands for:
Liquid
Assets
Safely
Earning Returns.
And so let's talk about how, sort of,
I came up with this order of key elements
of a prudent investment
because any prudent investment
where we wanna put money to keep it safe and accumulate
at a nice rate of return for a future goal
and, hopefully, have some tax advantages
associated with that.
There are key elements.
And I noticed early in my financial planning career
that most financial advisors,
I thought, were out of order, out of whack
in what they placed as the number one priority.
It seemed like most advisors and, hence, their clients
sort of were greedy and always put,
"Ooh, I, I've gotta get a rate of return first."
And you probably know that if you go after
high rates of return, you're going to incur higher risks.
And there's a lot of people that of course are risk adverse.
They don't want to risk losing their money
but you want the highest rate of return
you can get with the lowest amount of risk
but those two sort of work against each other.
And so I found that most serious tragedies or
or times when people lost their homes in foreclosure,
like in 2008 and
times where maybe they had setbacks
is when they lacked liquidity, okay?
Liquidity is the ability to access your money
when you need it without incurring penalties or taxes or,
or having to wait to sell a piece of real estate
to get your money out of there because it was tied up.
And so I noticed that liquidity was really
the number one reason why most people lost tons of money
and had to start over again.
The second big reason that people lost money
is they didn't protect their principle
and they didn't choose safe institutions
or safe vehicles to put their money into.
And so liquidity ended up being number one
and number two was safety.
Number three was rate of return.
And yeah, so many advisors put those in reverse order.
So I began to teach this years ago as the key elements
of a prudent investment, liquidity, safety, rate of return
and then any tax benefits are nice,
but they're sort of like icing on the cake, so to speak.
And so in this particular episode,
I'm gonna talk about why I wrote the book,
"The LASER Fund" and my favorite vehicle.
I call it that because it passes what I call the LASER Test
with flying colors,
compared to where most Americans put their serious cash.
This is money earmarked for future long term goals
like retirement or college funding for their kids
and grandkids or working capital for business or real estate
management or emergency funds or what have you.
And so my 11th book has been flying off of our warehouse
shelves and it's titled, "The LASER Fund, How To Diversify
and Create the Foundation For A Tax Free Retirement."
Now stay with me until the end of this episode
cuz I'm going to gift you a free copy
of this 300 page book.
You don't have to shell out 20 bucks on Amazon.
I'll gift you a copy.
I'll show you how to get that.
And as I proceed here, be sure and click like,
or post a comment, but most importantly,
subscribe, it's free.
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and I post a new one almost on a daily basis, okay?
So you'll notice here on the front of the book,
I'll just use this as an example, L, S, R, T, okay?
L stands for liquidity.
S is safety.
R is return, or rid of return and T are tax advantages.
Okay and you'll notice these are bars, that's because,
in the book, I talk about in chapter form,
the LASER Test because you can take any investment.
You could put money into real estate,
you could put it into municipal bonds, mutual funds,
annuities, all kinds of different investments,
stocks and bonds and what have you,
but based upon the the risk associated with it,
you can begin to assign a score
on a scale of one to 10, based upon these four pillars.
So that's why they are pillars.
And this is a bar based upon zero, one, two, three, four,
five, six, seven, eight, nine, 10,
in that particular chapter.
And so for example,
liquidity is the ability
to access your money when you need it
with an electronic funds transfer or phone call.
A lot of times people get confused and think liquidity
would be like money in a bank because a bank
or credit union has a drive up window.
Now, in actuality, if things get really bad in this country
banks and credit unions can say,
"sorry, you you cannot get your money
out of here for six months if there's a run on the bank,"
did you know that?
You need to ask yourself, where do banks and credit unions
put their tier one assets?
Now a tier one asset is money that they have to have
on hand, liquid and safe accessible,
in case of a run on their bank.
And they'll turn around and put 30 to 40%
of their tier one assets, for example,
into insurance companies
because that's a multi-trillion dollar industry
and they have reserve requirements
that are far more stringent than banks and credit unions.
That's what happened in 2008, when about 400 banks
went under and 900 more were on the brink of going under
in what, what is called the watch list.
The federal government asked the five major banks
in America to disclose where they had their tier one assets
for liquidity and safety.
And it was in insurance companies.
A lot of times in BOLI, B, O, L, I,
Bank Owned Life Insurance.
And what they were doing,
is they were borrowing OPM, other people's money,
and paying a measly 1% or less.
And they turned around and increased the safety, okay?
And it was totally liquid by usually five, six,
notches higher and they actually got about
five times the return, they were getting 5%.
They didn't even link to an index
like I suggest in this book.
So every million that we loan a bank,
by depositing it to them,
they turn around, they pay $10,000 a year in interest.
They turn around and make $50,000, $50,000 as 500%
or five times what they pay us, which is only $10,000.
And so I often ask, "would you hire an employee
for 10 grand that made you an extra 50 grand?"
Yeah, would you buy a widget machine for $10,000
that made you an extra $50,000?
Yeah, I'll do that all day long, that's called a 500% return
on employment cost or equipment cost.
And so you want to choose the vehicles
that you can get your money when you need it.
Even with an electronic funds transfer or phone call
in this day and age, not just an institution
that has a drive up window, does that make sense?
So liquidity, you'll find out when you study this book,
that a max funded indexed insurance contract structured
correctly and funded properly passes the liquidity test
with flying colors.
Safety, not only you get safety of the institution
because the multi-trillion dollar insurance industry
is probably the last domino that would fall
if we had a total collapse of the monetary system
in America, I wanna have my money
and the last domino that would fall,
because if that collapsed,
it wouldn't matter if I had my money, okay?
The American dollar would be worthless.
You better be able to grow carrots in your backyard.
So liquidity is number one, safety number two.
That's why I love "The LASER Fund"
because it scores way up here on a scale of one to 10,
eight, nine, 10 out of 10 possible points.
Most places, IRA 401ks.
If you tap into it, you, you have to pay a 10% penalty.
If you're under the age of 59 1/2, you have to pay tax.
Some companies won't let you tap into it.
Money in trapped inside of a piece of real estate and equity
or a home, you have to sell it
or you have to try to borrow on it.
And sometimes when you need it the worst,
it's the hardest to get, you can't qualify.
So there's a lot of investments that do not pass
the liquidity and safety test,
much more than two or three out of a possible 10.
When we talk about rate of return,
you don't need pie in the sky rates of return.
If you have tax favored rates of return and not,
not just tax deferred, you know, tax deferred is okay,
but tax free is far better.
And so you'll find out that there's only a few vehicles
in the Internal Revenue Code that allow you to accumulate
your money, totally tax free.
And "The LASER Fund" does that under section 72(e),
you can access that money, including all the gain,
totally tax free under section 77 0 2.
And when you ultimately die, anything left in there,
blossoms, increases in value.
If I died right now, every million I might have
in a portfolio of LASER funds would blossom
to about two million and transfer tax free.
That is very advantageous because it's tax free.
Nothing else does that in the internal revenue code,
not even municipal bonds or Roth's, okay?
The rate of return, I've averaged, you know, 9.62%
over 20 year periods.
Some periods you may not earn anything,
but you don't lose because of indexing.
Other times you might make as much as 25% or 61%.
Like some of our clients did using "The LASER Fund"
in the year 2020 to 2021 because of COVID-19 pandemic.
But if you earned a 10% tax free return,
that would be like earning 15, 16% in a tax deferred
IRA or 401k, pulling out the money and having to pay tax
of a third between federal and state tax to net 10.
I only have to earn 10 to net 10, does that make sense?
In a, a max funded, a max funded LASER fund,
if it's structured correctly.
Now I'm actually earning maybe 1% higher than that,
I'm earning 11 and netting 10,
or earning seven and netting six
or earning 25 and netting 24.
But these are the four pillars.
So the LASER Test is liquidity, number one,
two is safety, number three is rate of return
and the, the fourth is tax benefits.
When you take any other financial vehicle,
all the popular ones out there,
the best scores are usually only about 18, 20, 22
out of a possible one, two, three, four, 40 points.
"The LASER Fund" is called that because it's the only one
that scores like 33, 35.
It may only score 33 during the first five years,
but after five years, which is really the definition
of a long term goal, it scores 35 or higher.
That's why it's my favorite vehicle.
That's why I would recommend that 40 to 60%,
maybe more of your retirement income pass the LASER Test.
And so this is for serious cash, does that make sense?
Here's how you can claim your free copy
to learn more about this if this is intriguing you.
I will gift you a, a copy of this.
Here's how you claim your free copy.
You simply go to laserfund.com, L, A, S, E, R, fund.com.
Click on the link below, you contribute a nominal amount
towards the shipping and handling,
I cover the rest of that, and I will pay for the book.
I'll send that out to you.
There's also options there if you like to listen and learn,
watch and learn.
We even have online educational events.
I have a lot of other educational videos on this channel.
There's options there to join us for a webinar
or even a live event in your area.
But there's also an opportunity to pick the brains
of some of the top financial advisors, that I've trained
in this country, that can help you understand how to apply
these concepts in your particular set of circumstances.
So engage, this is about you and your brighter future
and I want your money to pass the LASER Test.
(tranquil guitar music)