- This allows me to accumulate my money tax free.
Be able to access my money anytime,
even before the age of 59 and a half,
totally income tax free.
And at the end of the day, when I finally die,
anything I leave behind to my wife, my kids, my grandkids,
a church or charity, actually blossoms.
Increases in value and transfers income tax free.
So in this episode,
I'm going to address why Universal Life,
Indexed Universal Life in particular,
is my favorite financial vehicle bar none.
(upbeat music)
So I'm Doug Andrew.
And I've been helping people optimize assets
and minimize taxes now for nearly five decades.
I'm 70 years old.
I started as a financial strategist in 1974.
Now, if you watch very many of my educational episodes
on this channel,
you'll sort of hear my history.
But you'll learn quickly that my favorite financial vehicle
for all kinds of long-term goals, retirement,
college funding for your kids and grandkids,
working capital for your business, real estate management,
emergency funds, pension maximization, lump sums,
estate planning.
It's like a financial Swiss Army knife.
It's got all kinds of uses.
It's actually the dream solution.
And it is a max funded,
indexed universal life insurance policy,
structured correctly and funded properly.
If it is, it is deemed a laser fund, okay?
So why is this my favorite financial vehicle?
Well, in a nutshell,
there's only a very small handful of financial instruments
that have the tax advantages
of a max funded indexed insurance policy.
What is it?
This is really the brainchild of EF Hutton back in 1980.
And they decided, you know what?
Instead of trying to earn 12% average rates of return
with stocks and mutual funds,
they realized that if you were earning 12% on mutual funds,
and most people aren't.
They're only earning between 3.5 to nine percent.
You're not netting nine percent.
You're only netting six percent after tax
at the end of the day.
And so they go,
"Even if we could earn 12% for our clients,
on a million dollars at the end of the day,
if they're earning 12%, they pull out 120 grand,
they pay a third in taxes,
they only net 80,000 or eight percent
to buy gas and groceries, prescriptions and golf green fees.
But then you subtract another one percent for the fees
they charge on a million-dollar portfolio,
you're earning 12 to net seven.
EF Hutton said, "You know what?
Let's just put money into actually,
the multi-trillion dollar insurance industry.
They're the backbone of America
and the backbone of the world.
Some of the best money managers
and we can earn a more conservative,
predictable rate of return of 11 and net 10."
Well, this is by taking the least amount of insurance
the IRS will let you get away with
and putting in the most money the IRS allows
as fast as they allow.
And this is dictated by three tax citations
called TEFRA, DEFRA and TAMRA.
You can search those on my channel
to understand what I'm talking about.
But when you do that,
when you adhere to those tax citations,
then your money grows tax-free.
You can access it tax-free, and when you die,
it blossoms and transfers tax-free under section 72E, 7702,
and 101a of the Internal Revenue Code, okay?
So when we talk about
why this is my favorite financial vehicle,
because so many people say,
"Well, I've never seen an insurance policy that does that."
And sometimes I just go,
"Oh, come on. Because you've never seen it,
you don't think it exists?
Have you ever seen your brain?
Well, how do you know that exists?"
That's the stupidest reasoning I've ever heard!
The ones that I can show you, most people,
they will fund it because most people,
as they approach retirement, let's say,
they want to reposition money
and they realize that they're not in a lower tax bracket.
So they get the money outta those IRAs or 401ks.
And they begin to sell their real estate properties.
They're tired of being a landlord,
taking out the trash, evicting tenants and fixing toilets.
And so they start repositioning assets
that are less management-intensive
and they wanna get out of those that are being taxed,
and they want to make sure
that inflation helps them instead of hinders them.
And they want to earn predictable rates of return
and they want to get rid of the danger of market volatility.
So they say, "Doug,
how do we sort of protect ourselves from the negative impact
of taxes, inflation, and market volatility?"
And I go, "No brainer. A max funded IUL."
And that's where it's totally tax free.
You link your returns to the things that inflate.
You'll always keep up with,
or outpace inflation if you do it correctly.
I always have, for over four decades.
And you're earning predictable rates of return
that historically has beaten inflation.
You're not subject to market volatility.
When the market is doing well, you benefit.
But when the market goes down, you don't lose a dime.
You may not make much of anything when the market crashes,
but you don't lose.
And that's what people need in retirement, okay?
And so it's my favorite vehicle
because ever since 1980,
when EF Hutton first introduced this concept,
they were the brainchild behind it,
I have averaged 9.62%.
Now, when interest rates started to come down in America
in the mid-90s,
Indexed Universal Life was introduced in 1997.
Frankly, since 1997, I have earned average returns of 11.17
and I've netted 10.07.
Meaning that my money is growing
at a net internal rate of return of 10%.
My money doubles every 7.2 years tax free.
Now at 9.6, you divide that into the rule of 72
and your money doubles every seven and a half years.
7.5 years instead of 10% is every 7.2.
So I did, let's just say,
every seven and a half years, your money doubles.
It's very predictable.
Now, so if you started out with a one-time investment
of 125,000, that'll double to 250,
to a half a million, to a million to 2 million,
as it doubles four times to $2 million nest egg,
totally tax free.
If you start out with 500,000,
500,000 at seven and a half per,
seven and a half year doubling, that's earning 9.6.
The 500,000 doubles to a million, then to two million,
then to four million,
then to eight million by the 30th year.
And people say, "Come on, has that really happened?"
Absolutely! We've had many clients that now have $8 million
and they started out with 500 grand.
Now most of our clients with IUL that now have eight million
they didn't even learn about this until
the last seven and a half to 10 years.
And so they start out with maybe six million bucks trapped
in IRAs or 401ks.
And they realize they needed to get that out.
That the tax is over and done with sooner than later.
Continuing to defer, procrastinate,
and take RMDs does not save them tax over the long haul.
So they do strategic rollouts.
I'm thinking of one couple in California.
It took five years.
We got their six million out of their IRAs of 401ks.
We bit the bullet and paid a third, two million in tax.
We took them from the highest tax bracket though,
down to a zero percent tax bracket
because we took the net of four million,
funded their IUL policies,
and then that four million
in another seven and a half years, doubled to eight million.
Now they've had eight million
for the last couple of years earning between eight to 10%.
Come on, they're earning 600 to 800,000 a year, tax free.
Do you know they only need 300,000 to live on?
Because they don't even have to put
that 300 grand on their 1040 tax return.
There's nowhere to put it. It's tax free.
The IRS knows they're receiving it.
The IRS knows everything.
But they don't have to pay tax.
So they're actually earning a half a million more
than they need to live on.
Can you understand why
this is my favorite financial vehicle?
It knocks the socks off of traditional IRAs or 401ks
or even Roth IRAs or 401ks.
And if you wanna know the difference
between a max funded IUL or laser fund or a Roth,
Roths only have two advantages.
Your money accumulates tax free
and when you take it out, it's tax free.
But you fund it with after-tax dollars.
A laser fund has those two advantages
and four additional advantages.
Roths will never have, search this channel,
why an IUL is better than a Roth.
But if you wanna learn more
and do you like to read and learn,
watch and learn or listen and learn,
here's how you can do it.
I want to gift you a copy
of my most recent bestselling book.
It's 300 pages. It's called "The LASER Fund".
Now it's actually two books in one.
This side is about 200 pages, 14 chapters,
with all the charts and graphs
if you're a left brain learner.
If you're a right brain learner, you learn by stories,
you flip over and read this book.
This is 12 chapters,
about 100 pages with 62 actual client stories
of how a max funded IUL
knocks the socks off of most other vehicles.
Why it's the dream solution.
And you'll begin to learn why it's my favorite vehicle.
If you wanna use your whole brain,
then read both of these books.
But here's how you can acquire one of these.
If you go to Amazon, they're 20 bucks.
And you pay shipping and handling.
If you do that, thank you.
But hey, I wanna gift you a copy free.
So you simply go to LASERFund, L-A-S-E-Rfund.com,
or click on the link below
and you contribute a nominal amount
towards the shipping and handling.
I require some skin in the game, come on.
But I'll pay for the book.
I'll send out a hard copy to you via priority mail.
But while you're in there claiming that free copy,
if you'd like to listen and learn or watch and learn,
there's audio and video formats there.
Check out some of the educational webinars
we do on a regular basis.
They're free.
You can even schedule an appointment to talk
to an IUL specialist that I oversee
that knows how to do this correctly.
They'll create some illustrations for you at no cost
or obligation.
Because if you're intrigued,
it's imperative that it's done correctly.
You structure it correctly.
Unfortunately, I would say over 99% of agents selling IUL
don't know how to do this.
What would it cost you?
It means that your IUL would be lucky
to earn a gross return of seven or eight,
and you'd be lucky to net five or six.
You want an IUL that will average 11 and net 10.
And most agents don't know how to do that by diversifying
and rebalancing and structuring it correctly.
So make sure that you reach out to one that I've trained.
There's over 5,000.
They're called IUL Insiders.
And this is the coalition or network
of those who know how to do it right.
So don't make the mistake
of having it structured the wrong way.
(upbeat music)