Choose tax free accumulation access and multiplied transfer
of your money. In this episode, I'm going to
address the question, "What are tax-free investment options>?" I've been asked
this question thousands of times in the 46 plus years
that I've helped people optimize assets and minimize taxes.
And I share with them my favorite vehicle
that allows me to accumulate access and transfer my money totally tax-free.
It's probably not what you think. Get ready to be blown away.
You're going to learn some things that I teach CPAs and tax attorneys in America
for advanced continuing education. And they sit there with their mouths
open. So, you're going to have some aha moments
here in the next few minutes.
My name is Doug Andrew and I've helped people understand how to optimize assets
but minimize taxes for more than 46 years. Many times,
I teach advanced continuing education
because most CPAs and tax attorneys have to have every couple of years like
200 hours of continuing education. So, my courses are
qualified for that and they come through and
they sit there with their mouths open because they didn't need to
learn what i'm teaching them to become a CPA.
They didn't need to know this to get their LLM
degree. What's that? A masters in taxation as an attorney.
And they go, "Well, I've heard of these tax laws. I've heard of these sections of the
internal revenue code but I never did understand them. Doug, you
made them so clear. Where have I been? I think we've
been advising our clients wrong." I go, "Well, I wouldn't
go that far. It wasn't wrong advice. You've been telling them to sort of
follow the herd and put their money in IRAs and 401Ks. It wasn't the best
advice. You know that now. It was maybe good
advice. But it was a far cry from the best
advice." And they go, "You're absolutely right."
I don't know if i want to go back to my clients and show them the best way
because I'm the one that told them oh yeah do an IRA, 401K in the market.
Well, I said, "If you don't tell them, somebody else will."
So, you ought to go back and say, "Hey, I've learned about something that's better."
So, when people ask about tax-free options, first of all, I want you to
understand the difference, dramatic difference between taxed as
earned investments, tax deferred and totally tax-free. And
then you'll understand why tax-free is the way to go. So,
most people in america save the absolute worst way. They have their money in taxed
as earned accounts with banks, credit unions,
even mutual funds and so forth where every single year, the institution
gives you your interest that you earned on a form
you have to report it on your tax return. So, you're paying taxes every year on
your earnings. Let's say you started out with
a dollar. Now, a dollar doubling every period
for 20 periods. A dollar goes to 2 to 4, 8, 16, 32, 64.
do you know after 20 periods of a dollar doubling a dollar will be worth a
million forty eight thousand If it's tax free. If it's taxed as earned
like i just described, in a 25% tax bracket, most Americans pay
at least 25% in taxes between federal and if you live
in one of 41 out of 50 states that has a state income tax.
You'll pay at least 25% in tax. So, if a dollar doubles to 2,
you pay tax of 25, that's only 25 cents. You got a buck 75
left after tax. Now, the $1.75, the next year doubles to $3.50 and you pay tax
on that. Do you know what you'll have at the end
of 20 periods, instead of a million 48,000,
only $72,000.
If you're in a 33% tax bracket,you'll only have
$27,000. Only 2.7% of what you could have had.
Most people don't understand this. And they just put their money in banks and
credit unions and pay taxed as earned on their investments. Now,
some people thump themselves on the chest and they go,
"I have my money in a tax deferred IRA. My 401K,
is tax deferred. Look, my dollar has doubled
20 periods. It's now worth a million dollars. And it's a million bucks." I go,
"Well, it's only tax-deferred." That's not all your money. See, you agreed
that the government now gets their portion on the back end when you retire."
And so, that's not your money. Third of that belongs to the government when you
take it out. If it's earning 9% let's say, a million earning
nine percent is 90 grand. You pull out that 90,000 of earnings,
you're only netting 60,000 because of a third of it it's going to go out the
window in taxes. And so, the million isn't all your money.
Only two-thirds of it. 660,000 of it is your money. The
rest belongs to the government. If people go, "Golly, I was really hoping
on my million dollar nest egg to earn 10% or 100,000 a year."
And they pull out 100,000 but they're not netting 100(thousand).
They're only netting 67,000.
In order to net 100(thousand), they have to pull out 50% more money.
See, in a 33% bracket, you have to pull out 50% more.
What's 50% more than 100,000? 50,000.
You have to pull out 150,000. Pay tax of a third fifty
to net a hundred. Do you know the million dollar nest egg will be gone drain dry
in 11 years? So, my favorite vehicle is totally
tax-free. Because if I have a million dollars
that's totally tax-free and I'm earning 10
which is what I have been earning for the last 27 years.
On the average, 10.07 to be exact. I pull out a hundred grand and it's tax free.
If I pull out 100,000 and I net 100,000
my million dollar nest egg stays there. I still have a million bucks in 11
years. If my wife and I, one of us make it
another 20 years to age 96, when the person with a million in
IRAs and 401Ks has been living on charity welfare their
children for support for the last 20 years, they ran out of money at age 76.
I still have a hundred grand of income for another 20 years
and I still have my million at age 96. An extra 20 years of 100 grand is 2
million and I still have my million. That's a 3
million dollar better retirement nest egg on the same amount of money
assuming the same rate of return of 10%. And by the way, most IRAs and
401Ks don't earn 10%. I'm giving them the benefit of the doubt.
That's a 3 million dollar better retirement nest egg.
How many of you watching this would like to have a 3 million dollar better
retirement nest egg. Yeah, hello? I do that by using max-funded
index universal life insurance contracts. Because that's where i have earned an
average net cash on cash internal rate of return after all
costs and fees of slightly over 10%.
And by doing that, it means that I'm able to accumulate my money tax-free.
Now, this is why I felt many people reposition
assets out of yet-to-be taxed IRAs and 401Ks.
Get the taxes over and done with sooner than later over maybe 5
years. And get the money out of the market.
Get rid of that market volatility. Because too many people are too top
heavy in what i call the investment bucket
that they have to pay tax on the rest of their life,
if they string it out or take required minimum distributions or whatever (worst
advice i've ever heard, RMDs) and they leave it there,
no, no. You want to get it out over into the tax free
bucket. I would recommend between 40 to 60 percent of your money be
totally tax-free. There's basically 3 choices there.
Municipal bonds, they're low yielding and a lot of
municipalities get into trouble financially and have to
file bankruptcy. So, I've always earned a rate of return of 2, 3, 4 percent
higher than municipal bond rates at any time.
Roths. Now, Roths are a step in the right direction but there's too many
strings attached. You can only put in a certain dollar
amount a certain percent of your income. And you have to leave it there for 5
years until you're 59 ½ and... And so, Roths only have 2 advantages.
You fund them with after tax money. It accumulates tax tax-free and you can
take it out tax-free. My favorite vehicle, The Laser Fund has
those 2 benefits. Always has. For over 100 years, it's been grandfathered in the
internal revenue code under 3 sections.
72E, 7702, and 101A. But see my Laser Fund, my max-funded index
universal life contracts, they allow me to put in huge lump sums.
You can't put in 300 grand into a Roth unless a one-time rollover.
I can put in 300,000. If I don't, I can put in let's say just 30,000.
And I can make up for the other 270,000 anytime I want. You can't do that with
the Roth. Once you don't use the room in a given tax year, you've lost it.
If i put in 300,000 and 30 days later, I want to pull out 250,000 for an
emergency or an investment. I can access money at any time for any
reason. There's no penalties. You can't do that
with a Roth. I can use indexing. So, when the market
goes up, I get to benefit. And I've earned 16 and 25 and even 55
some years. But when the market loses, I don't lose.
Because my money is not in the market. It's safely tucked in the insurance
company and they are simply paying me whatever the index that i
choose because they know how to buy options. So, they're not out anything.
Because if the market loses, I may not make anything that year. But I don't lose
what I started out with at the beginning of the year.
That's called indexing. I get to use that indexing strategy. But
why do I like the Laser Fund, the max funded IUL?
It's because it's the only vehicle that blossoms
when i finally die. I'm 68. If i die tomorrow in an accident, every
million would blossom to about 2 and a half million and transfer income tax
free to my wife and then to my kids and then to our
church. There's not a Roth around that will do that.
Why would I ever own a Roth? I never have it, I never will.
When I can have the two benefits of a Roth and four additional benefits Roths
will never have. So, when people say "What are tax-free
investment options?" Basically 3. Municipal bonds,
Roths and max-funded indexed universal life insurance contracts which i call
The Taser Fund. Laser is an acronym that stands for liquid
assets safely earning returns. And by far, that's my favorite vehicle.
I've helped many many couples who had 200,000
of annual income out of their IRAs and so forth
and it was all showing up on their 1040 tax return.
And in less than 5 years, i took 120,000 or more of that off their 1040 tax
return. The IRS knows they're receiving it but they know
it's tax-free. It's not even worth auditing. This has been grandfathered and
protected in the internal revenue code for
over 100 years. If you did the math from what I just said,
they went from a 200,000 taxable income down to
80,000 because I moved 120,000 over to the tax-free bucket.
They would have paid taxes of a third on that 120.
That's 40,000. If they live... One of them lives 25 years, I just saved
them an extra 1 million dollars of
unnecessary tax by moving money over to the
tax-free bucket in the laser fund earning higher rates of return than the
average place where most people put their retirement
assets. If you want to learn more, this is why I'm an author.
I've written 11 books. And many of my books addressed this. But my most recent
book is flying out of our warehouse, okay?
Hundreds of books a day are going out. It's titled The Laser Fund. How to
diversify and create the foundation for a tax-free
retirement. This is curriculum actually for some of these CPAs and tax attorneys
but it's written on any level for you to understand. There's
charts and graphs. If you like to learn by stories, you flip
it over and there's 62 actual client stories.
Now, this retails for $20. This isn't about selling you some
book. This is about giving you the information. I will
pay for the book. I'll buy the book. You simply claim your free copy by going to
laserfund, l-a-s-e-r. Laserfund.com. Simply pay $5.95 shipping and handling.
That doesn't even cost the shipping and handling but
that doesn't even cover the shipping and handling by the way.
This is like I want to get the information
out to you and I'm very very blessed to be able to do that
because a lot of people then want to listen and learn, watch and learn
and get educated. I am into empowering you with
education. Because once you learn what you can do to protect yourself
and what are the best tax free investment options,
you'll agree with me a maximum funded indexed universal life insurance
contract if it's structured properly and funded
correctly, will knock the socks off of any other
options that are out there. I've benefited from this and I want you
to benefit also.
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