What do wealthy people do with their money to become wealthy? Welcome back and
this episode is going to give you insights into opportunities. Maybe you
didn't even know existed before. Why the wealthy people become wealthier and
those that don't, it's because they don't take time to understand and learn what
the rich people do to become rich. I'm Doug Andrew. People asked in the 45 years
that I've been helping people optimize financial assets. "Dough, what's the secret?"
Well, I will share with you what the secret is. But it's really no secret. But
I'm going to explain what multi millionaires and billionaires do. One of
the very first things that these mega successful people do is they learn and
discipline themselves to set aside money and they learn to live on less than what
they earn. Usually, they save 50% of their income. But they save at
a minimum you should save 20% of your income. Most Americans only save
between 1 to 3% of their income and then they wonder why they
don't get wealthier and then they save up and they spend it on depreciating
assets. Justifying it. So if you keep doing that, you're never going to
become financially independent. Let me show you what the multi millionaires and
billionaires do. And I'm going to give you some actual examples and stories because
a lot of people don't really understand that many of them sometimes to higher
risk. You know ventures, in order to make money but they all had a foundation. The
ones that I've interviewed and I was just meeting with a billionaire
just a few days ago. He admitted that everything he does, he has a very solid
foundation where he puts his serious cash. And any money that he sort of plays
with and this guy plays with hundreds of millions.
He knows that 40% of the investments he puts his money into will probably lose.
But he says I've learned to recognize if it's a losing proposition sooner than
later instead of hanging in there and waiting and waiting and waiting. And so
he gets out. But he does know it's 40% of the places where he puts his
money, he will lose 60%, he'll gain. It's cutting the losses as quick as
possible. I thought that was a pretty insightful but let me give you a few
examples. Walt Disney. Now, Walt Disney I admire. He actually went broke 7
times and had a nervous breakdown before he finally made it. I always loved how he
shared that his salvation was Mickey Mouse. When he was really just broke, he
told his brother, "Hey, I have an idea." Now, Walt was afraid of mice. Did you know
that? And he says, "I had this idea. I'm going to make a cartoon with that makes a
mouse look friendly." And his brother goes, "That'll never work."
Okay, well Mickey Mouse has been the number one entertainer in America for 70
years. A recession-proof Mouse and that's what Disneyland was built around. And so
Walt., I could see opportunities. Now we remember Walt. Most people don't even
remember Walt's brother's name. It was Roy. But see Walt Disney, when he got into
trouble, he was ready to just again, he was destitute. After failing in the
pursuit of traditional means of financing to build what would become
Disneyland, which we all loved. Walt decided to provide his own financing
because he couldn't get any loans. And so a large part of this capital came from
what I call his own family bank. Which is funded with the same instruments that I
fund my family bank. A maximum funded life-insurance policy. This is a life
insurance policy that's designed for living benefits. For for putting money
aside and having it grow at a nice rate return of 4,5,6,7,8,9
10. I've averaged 10.07% net tax-free on my life
insurance policy for the last 25 years.
And maybe you're going, "Huh? I've never seen an insurance policy do that." You've never
seen one structured like this. So you use it for death benefit that if you happen
to die, it'll blossom and help those that you
leave behind be financially independent. But he, like I use my insurance policy,
used it for living benefits. So he was able to borrow money from his cash value
life insurance to fund the Disneyland and that's how Disneyland got started.
Did you know that? That's what Walt Disney did. He had his own family bank
and he used it with maximum funded life insurance. Who else did that? Do you know
who Ray Kroc? Yes, he is the one that founded McDonald's. He borrowed money
from 2 cash value life insurance policies. His family bank is what I call
it. And he did this to help cover the salaries of key employees. He also used
some of the money to create an advertising campaign around the emerging
mascot of Ronald McDonald. That's where he did that. So, is this giving you some
insights? These mega wealthy people have their own resources. It's what I call
becoming your own banker. They used their own resources and borrowed money. Now, if
you don't know how to do this, in my maximum funded insurance contracts, which
I call the laser fund. If I need money, a 100,000, 200,000, a
million, I borrow it out at 2% and they keep paying me 2%.
Don't cost me nothing to use my money. But most of the time I take the second
option. I borrow out a million dollars and they charge me 5%, the
insurance company, that's 50,000. But they keep crediting me whatever the
index does. Do you know in 2017, I had many clients that did what I do? They
borrowed a million, the insurance company charged in 5% or 50,000
but they earned 25% that year. So they earned 250,000
on their insurance policy. While it was earning that, they were
using the money also for something else and they were being charged 5%.
They made 250 grand in interest on their insurance policy. They subtracted the 50,
they netted 20 percent or 200,000 on their money while they were using their
money for other purposes. That's what wealthy people do. One more
example, JC Penney. Do you know the stock market crash of 1929 and the ensuing
Great Depression devastated the stores? The JC Penney stores back then.
James Penney was able to borrow against his cash value life-insurance policies
to help the company meet its payroll on the day-to-day expenses and help to stay
afloat during the Great Depression. Because insurance companies went through
the Great Depression with flying colors. Paying to 2, 2 1/2 and 3, 3 1/2%.
Do you know that banks closed their doors? 40% never opened their
doors again. Some real estate in the Great Depression dropped as much as 80%.
Where do you think smart people? The multimillionaires and billionaires
have their money in the Great Depression. In insurance companies, that's what the
mega wealthy people do. So are you giving a glimpse of what wealthy people do with
their money to become wealthy and protect that wealth? Let's use a
modern-day example here. Right up to Kearney Vance and this is David Walker.
Now, maybe you've heard of him. He was the US former Comptroller General for the
general Accountability Office of the United States. Treasury of the government.
Okay, now he resigned actually from being that during the Obama administration. You
know why? Because in 2008 this country was on the verge of collapse. The
monetary system and everything and he wanted to tell the American public the
truth of how serious trouble we were in unless certain things took place. And the
administration would not let him do that. And he said I'm resigning because he
wanted to tell the public the truth. And he went out after that. He knew how rough
things were going to be and so he got his money out of the market and put it
into maximum funded life insurance like I call my laser fund. Because he
how serious the economy was and of course, most Americans that had their
money in the market lost 40% in 2008. And so this is what the smart, savvy
people do that know what's going on in the world economy to protect their money.
So here's the take away. The wealthy people, they understand the 3 marvels
of wealth accumulation. Compound interest. I've earned compound interest averaging
8 to 10% on my max funded insurance contracts for 45 years.
I've earned some years 25%. Some years as high as 55% but on
the average about 10%. But it's tax-free. So mega wealthy people know the
second Marvel of wealth accumulation isn't just tacked. It isn't just compound
interest. It's tax free. That's what the Rothschild said. See, Einstein said, "Oh, the
eighth wonder of the world is compound interest." No, Rothschild says no the
eighth wonder of the world is compound interest tax-free and that's only
accomplished really in maximum funded life insurance contracts. Where it stays
tax-free and then blossoms when you die. The third marvel is safe positive
leverage. The ability to own and control assets with very little or none of your
money tied up or at risk in that asset. And that's why the mega wealthy people,
they go, "Okay, I'm going to own these skyscrapers, these buildings. I'm going to
own all of in. But I'm not going to tie up my equity in there. I'm going to keep that
over here safe and a laser fund. So it's liquid and if this skyscraper goes down
and value or gets toppled in a terrorist attack, their money's safe. Because it's
not in the building. It's over here in the laser fund. I do that too. They can
borrow money for the real estate at 3% tax deductible and that cost of two and
they make 8 to 10% on the laser fund. This is how the rich get
richer because they're using OPM, other people's money and the bank's money and
they only pay 2%. 20,000 on every million but they make
80 to a 100,000 a year on every million they borrow by putting it in the laser
fund. That make a little bit of more sense to you. So I would recommend you
look into a laser fund or several. Most of these mega wealthy people have
sometimes 12,15,17 laser funds. I have several. My kids all have
several. And this is what you use for your family bank. So that when you get
into trouble like Disney, McDonald's, JC Penney did, they have access to their
money even though there was a depression going on. And banks were closing their
doors and real estate was falling 80%. They had access to their money.
They didn't lose you could do that too. I would recommend you watch this episode
here to sort of understand the difference between a battery approach to
a generator. If that resonates with you, you'll be given the opportunity to go to
the website - laserfund.com which is the title of my most recent book and I'll
send out a copy of that book to you for free. It's a 300 page book. Just pay 5.95
shipping and handling and you can become empowered so that you can
start doing what wealthy people do and you will be wealthy.