Generate 10% payouts that are totally tax-free. In this episode, I'm going to address reason
number 1 out of 5 to borrow money instead of withdraw money from an IUL policy. Get ready,
by the end of this video, you will understand why loan proceeds are income-tax-free at zero net cost.
So, I'm Doug Andrew I've been a financial strategist now for more than 48 years helping
people optimize their financial assets, minimize taxes, empower their authentic or what I call their
true wealth. But when they reach retirement I want people to not outlive their money.
I don't want them worrying about out living that money because of the negative impact of taxes,
inflation, and market volatility. When they accumulate money in my favorite instrument or
vehicle which I call the laser fund. Now, that's what I call it. In fact, I have a book by that
title that I want to gift you at the end of this episode. Laser is an acronym that stands for liquid
assets safely earning returns. Now, what is a laser fund? It is a max funded indexed universal life
insurance policy but it's structured correctly and funded properly. Unfortunately, I would say over 99%
of IUL policies in America would not pass the scrutiny of what I call a laser fund. So, when you
have a properly structured maximum funded IUL, it can pass the liquidity safety and rate of return
tests with flying colors. So, people are able to put in money and earn rates of return like I have.
I can't predict the future except based upon the past. I have earned average rates of return of 9.62%
If you round that is 9.6. Into the rule of 72, you divide 9.6 into 72 your
money will double every seven and a half years. So, yep, I've had many many people who started out with
let's say $500,000 and you don't have to start out with big sums of money, you can start out with 500
bucks a month. But if you start a stock away 500 a month it would maybe take 30 years before you had
a million dollars tax-free or if you started out with 500,000 I've had many people that double
that in seven and a half years to a million. Another seven and a half years and a million
doubles to two million. So, in the fifteenth year their five hundred thousand is worth two million
and then in another seven and a half years is worth four million that's in the 22nd
and a half year and at the end of 30 years they have 8 million now. They never added a
dime to that they started out with 500,000 or 9.6 percent tax-free, it's now worth 8 million.
Yep, we have people have 8 million dollars that are able to pull out eight hundred thousand a year,
10% payouts without depleting that principle of 8 million bucks. Sound too good to be true?
No, listen. So, you will learn in this series the five reasons why you want to borrow instead of
withdraw. But in this episode, let's just talk about this predictable way to be able to get
you know 8, 9, 10, percent payouts are higher. So that every million let's say you can
extrapolate from that number every million that you accumulate by the time you retire let's say
can generate a hundred thousand a year of tax free cash flow income without depleting principal
at the end of the day. Now, a lot of Americans can't do that. They have their money in the market
in traditional IRAs or 401ks and wall street was never designed to create predictable income.
In fact, the average stock market investor is only really earning about three and a half percent
according to Dalbar who studies investor behavior because people buy and sell at the wrong times.
If you bought and held you would earn maybe 9% before tax net 6. A million dollars would
generate ninety thousand dollars a year but you have to pay tax on that between federal and state
tax maybe of thirty thousand only netting sixty thousand or five thousand a month to buy gas and
groceries and so that's not the best way to save. I would recommend you get more like 8, 9, 10,
percent payouts are higher. Because if you can get a hundred thousand the tax-free that's better than
sixty thousand after-tax. But Dalbar says most people that have their money in the market are
really only earning three and a half percent because they're scared when the market
starts to drop and they sell low and then they wait... and then they buy
high and they're only averaging three and a half percent. That's why the financial services industry
created the four percent rule. They only want you to pull out four percent
when you retire. If you pull out more than that you have to sign a waiver that you won't sue them
for you out living your money, that's pretty pathetic. So, on a million-dollar nest egg they
only want you to pull out forty thousand even in a twenty five percent tax bracket you're paying
ten thousand in tax you're only netting thirty thousand or three percent. There's a better way
folks. A million-dollar nest egg can generate a 100,000 dollars a year of tax-free income.
Now, before I show you why this is tax-free. If this is arousing curiosity I would recommend
that you subscribe to this channel, it's free. Just click on subscribe and also click on that little
bell because then you'll be notified every time I post a new video which I do almost on a daily
basis. This is about you and your brighter future not about me. I'm 70 years old and no, I don't color
my hair. But I want you to avoid the mistakes that I've made. So, that's why I'm an author of 12 books
I'm going to gift you one at the end of this episode. When you access money the smart way out
of a max funded indexed universal life insurance contract where I would recommend at least 40 to
60 percent of your retirement assets are get it out of those iras or 401ks, strategically.
I have episodes on this channel to show you how to do this. When you take money out the smart way
it's tax-free and so I want you to watch the rest of the episodes in this series because this is
only 1 of 5 reasons why you want to borrow instead of withdraw money and I'll talk about with
universal life or any insurance policy. You can withdraw money tax-free up to your basis. But after
that you're going to have to pay tax which is dumb. Then you want to switch over to loans because
loan proceeds are not deemed earned passive or portfolio income by the IRS. There's only three
types of income Americans pay income tax on in America and this has been true since 1986. Who
was president of the united states in 1986? Ronald Reagan and it took until the second term before
he passed the 1986 tax reform act. One of the great things that happened with that is from that point
forward Americans only pay income tax on the front page of their 1040 tax return on earned
income that's you know wages and salaries. Passive income that would be rents and leases and so forth
if you own property or equipment or portfolio income that's like interest and dividends on an
investment. If you have income that is not one of those three types there's nowhere on a tax return
to put it because it's tax-free. The IRS will know you're receiving it but it's non-taxable, it's
that cut and dried. it's been that way for over 108 years in the internal revenue cup. This is
the message of the first 1 of 5 reasons to access money the smart way. Watch the other
four episodes, but I want you to be able to receive a copy of my most recent best-selling book that
will help you understand this even better. This is the 300-page laser fund book. We send out
100 to 700 of these a week, I'll pay for this book. You go to laserfund.com click on the link below
and you contribute a nominal amount towards the shipping and handling. I'll cover the rest of that
and I'll pay for the book and fire out a hard copy to you which is two books in one. This side
is about 200 pages 14 chapters with all the charts and graphs and explanations.
If you learn more by stories with your right brain you flip it over and read this one.
This is about 100 pages 12 chapters with 62 chicken soup for the financial soul stories
on how to diversify and create the foundation for a tax-free retirement and access your money the
smart way so it's always tax-free, income tax-free. So, go to laserfund.com. There's also options there
if you want to listen and learn or watch and learn. There's even an 18-hour master class if
you want to do a deep dive deeper than the book takes you. But this is about your brighter future.