Why have a limited supply like a battery-approach to retirement. Power-up your retirement with
a generator. I'm going to share in this episode why most people run out of money and how you
can avoid running out of money by using a generator-approach to your finances. So, I'm
Doug Andrew and I've been blessed in my life to help people optimize their financial assets,
minimize taxes and empower what I call their true or authentic wealth for more than 45
years. And I written several articles. I wrote an article about the difference between a
battery and a generator. So, I'm going to show you this concept because I have seen
countless people try to charge up their retirement battery, so to speak. Many well intending
financial advisors try to do this. So that hopefully it won't dead before you do. Well,
all to often, people's retirement resources their battery does go dead. And I'm going
to show you the 3 things that short out most retirement batteries. But what I want to do
is use a little Drawshop video to illustrate this difference so that you can begin to get
it. When I have helped people optimize their assets, I've noticed that many advisors have
been telling people for years "Well, put your money to these types of vehicle." Let's say,
traditional IRAs or 401Ks in the market. They try to charge up this retirement battery so
to speak that hopefully won't go dead before they do but there's 3 dangers that short out
that battery that I'm going to identify. The first one is taxes. Eroding away the portion
of the money because the government has a permanent tax lane. The others, inflation
that cuts the purchasing power in half about every 7 to 10 years. And then it's market
volatility. Like in 2008, 40% drop in people's IRAs or 401Ks. It, happened 2001 to 2003.
Well, this is Arnold Schwarzenegger, okay? It's going to happen again. Taxes go up because
of the irresponsible government spending and the printing of money. So, what I done throughout
my career is help people move from this battery that goes dead from those 3 things that shorted
out taxes and inflates the market volatility and empower them so they never outlive their
money by employing a generator-approach. Now, generator also means generations. This is
generational wealth. So, it goes really, really deep. So, when people go to traditional vehicles,
they think they're going to be earning 9 to 12 percent of the market because that's what
their advisors told them. But Dolbar who measures investor behavior says, "The actually return
is only about 3 and a half percent in and about any 20-year period. Because people buy
and sell at the wrong time." The market starts to crash and pretty soon they said, "Enough
already." And they sell low and the wait, wait, wait until the market goes up and then
they buy high. So, they're only earning 3 and a half. And this is what precipitated
the 4-percent rule in the financial services industry. And that's just unacceptable to
me. But you can lose money... Or have to worry about, "Oh, I can't take any income for a
few years until we come out in this recession." So, 4% is pretty pathetic. What I want to
do is give you not, like 4 volts. I want to give you 8, 10, 12 volts. I want you to get
10 to 12 percent rates of return. So, I love to empower people like you with a generator-approach.
And would you want to leave behind this much to your kids and grandkids when you can leave
behind this much? Why would you generate this much cash in retirement when you can generate
double or triple that? This is what we do when we empower people with what I call the
3 dimensions of authentic wealth. And so, to help you understand how to do that, first
of all, know that there is a huge difference between an approach to retirement that's probably
going to die before you do like a dead battery. No, when you learn how to re-position your
assets, get the money out of those IRAs or 401Ks and make them immune from those 3 dangers
--Taxes, Inflation and Market Volatility. So, let me give you a glimpse on how you can
do that. So, if that's clear, I'm sure you would like a generator instead of some battery
that might go dead before you do. So, for years, what I have done is I've written books.
I teach seminars. Sometimes 3-day event. Sometimes half-day, 6-hour. Even title retired by design.
And so, I've recorded a lot of master classes on that for people who can't fly in to Las
Vegas or San Francisco to live audience. And you can search and find several of these types
of master class and read some books. I'm passionate to provide people the resources to be able
to learn how to create a powerful generator on their money. And so, whatever where you
like to learn, if you like to read and learn or listen and learn; watch and learn, I'm
going to empower you with all kinds of material and curriculum to do that. But the key is
this: I've noticed in helping a lot of people not outlive their money in retirement. From
a financial standpoint, we have made transitions with their money so that they would have a
generator that would generate cashflow (for example) predictable rates of return tax-free.
And so, the big dangers that I referred to that cause most people's retirement batteries
to go the other taxes. So, I do is help people to be immune from taxes going up by converting
their tax-deferred IRAs or 401Ks to tax-free. Now, you can't just do that. You have to pull
the money out and pay the tax. And a lot of people go, "Oh, I don't want to do that."
And so, there's sort of duped into taking RMDs. Those are called Required Minimum Distributions.
And I think that's the worst advice I've ever heard. So, many times, we do strategic roll
outs where we get money out of the IRAs and 401Ks. Get the taxes get and over done with
sooner than later and then reposition the net after tax money into vehicles that are
tax-free from now on. My favorite vehicle to do that with, it's called the laser fund.
My most recent book is titled The Laser Fund. And the Laser Fund totally tax-free. But the
unique thing about it is at the end of the day whenever you die, anything that you have
in the Laser Fund, let's say I had a million bucks in my Laser Fund and then I got killed
on the freeway. And every million will blossom right now at my age (I'm 67) to 2 and a half
million and transfer tax-free. So, I'm not out anything. So, if you do pass away, your
family gets reimbursed many fold the taxes you pay by getting it out of the IRA and 401K.
Instead of thinking that you're saving tax by continuing to postpone and defer. Oh, no.
You're compounding the problem. Get the taxes over and done with in today's lower rates.
Instead of thinking the future rates are going to be lower. Most people, when I ask, "You
think future taxes are going to be lower?" No. "The same?" A couple of people do. But
the vast majority of my audience, I go, "How many think they're going to be higher?" "Yeah,
higher". "Then why do you keep postponing? Why do you keep deferring?" That's like procrastination.
When did procrastinating anything turn out good? It's painful but they get it out and
they turn to tax-free. Inflation, I make sure they link their returns to the things that
inflate. I don't like inflation anymore than you do. But it doesn't hurt me. I sort of
come along for the ride. If inflation goes to 5, I earn 10, 10½ . In fact, I've earned
about 5 ½% or more than the inflation rate at any given time in my lifetime in America.
If inflation goes to 10 like it did in 1980s, I earn 15 ½. If it goes to 20, I earn 25
½. A lot of advisors don't know how to do that. I can show you how to do that. You can
read books and understand. The last is market volatility. My heavens, the last thing you
want to short out your retirement battery is to have the market drop 30, 40 and 50 percent.
And you have to go, "Oh, we can't afford to take out any money for a few years until the
economy rebounds." Well, was that what you had in mind in retirement? Just sort of to
try to hunker down and wait out recession so that now you can enjoy it when the market
goes up again? That doesn't work. So, you want to have predictable rates of return that
are immune for market volatility. That when the market does well, you get to benefit.
When the market goes down, you don't lose. You may not make very much those years but
you still have the income based upon 5, 6, 7, 8, 9 percent pay outs. So, this is where
a million bucks could generate 80 to 100 thousand dollars a year of tax-free income into perpetuity
for generations. In my books, I talk about our family bank. You don't know what that
is. I don't think. But when I explain a family bank, everybody wants one. And I think you're
going to want one. But in our family bank, every time one of the oldest patriarch or
matriarch in our family dies, we get a tremendous infusion of tax re-capital that will continue
to be Laser Fund on the next oldest healthiest family member so we have generational wealth.
We'll never run out of money in the family. In fact, we will have so much, we can give
to charities. Most people, it dies. Their retirement batteries goes dead before they
do. And what does that left them with? Relying on social security? Charity? Their children
for support? I don't think we really want to rely on those resources in retirement because
our money went dead. So, I'm going to give you key takeaways. So, here's what I want
you to remember. I want you to get this: Don't follow the herd and use a battery approach
to try to charge up that retirement nest egg or whatever you want to call it (A battery).
When the average return for most IRAs or 401Ks invested in the market is only about 3½ according
to DALBAR. And don't be duped into the 4-percent rule that if you have a million bucks... "Oh
they only take out 4%. Only 40,000 a year." Why? You pull out 40,000, that's pretty pathetic
on a million dollar nest egg. But that's what the financial services industry does with
the battery approach. And you pull out 40,000, you have to pay tax. Let's say of 25%. That's
10,000 off the 40. So, you'll only net 30,000. Oh, but the asset managers charges 1% fee
annually on that million bucks. That's another 10 grand. You pull off 40,000 and only net
20,000 to buy gas groceries, prescriptions, golf green fees. That's pathetic. No, that
million dollars should generate 80,000 --8 volts, okay? 10 volts is 100,000. How much
more is 100,000 than 20,000? It's 5 times the income. This isn't a little bit better.
This is a whole lot better. This is like double, triple, quadruple, 5 times. And I can prove
it to you. We've helped people do that many, many years. So, would you like to have X amount
of income? Or would you like 3 times X? At the end of the day, would you like to leave
behind X amount to your family, your spouse? Or would you like to leave behind 3 or 4 or
5 X? Hello! Why in life would you generate this much when you could generate this much?
Why would you leave behind this when you could leave behind this? And people say, "Well,
which one do you have to choose?" You get both. What does that cost? It's being paid
for with otherwise payable tax that most people pay on tax-deferred IRAs and 401Ks. If you
want to know more about how this works, I would recommend you eliminate the dangers
of taxes by converting to tax-free. I teach how in this book --The Laser Fund. In fact
in all my books, I teach it. Number 2, have inflation work for you instead of against
you. You'll learn how here. And number 3 is get your money out of the market and rely
on predictable cash flow. So, when the market goes down, you don't lose. When the market
goes up, you get to participate. You will learn how I have earned an average of 8/10
percent. Some years, I made 25%. But on the average, a million bucks generates 100,000
a year of cash flow forever. That's called generational wealth. So, if you want to get
a copy of this book, it's free. You can go to Laserfund.com and you pay 5.95 shipping
and handling. And I'll fire one out to you for free. But this is actually 2 books. This
one has 15 chapters comprised of about 200 pages. And it talks about liquid assets safely
earning return. And how to measure a vehicle. So, it's a generator. This is all kinds of
material if you're more left brain. But if you're more right brain, you learn by stories,
read this one. You turn it over and you read this direction about 100 pages, 12 chapters.
And there's 62 actual client stories of how the Laser Fund is a superior vehicle. Not
just for retirement but college funding, emergency funds, business planning. Working capital.
All kinds of purposes. And if you want to use your whole brain, you read both sides.
And I want to send one of these out to you free. And there's also master classes that
you can attend and go on a deep dive. But that's my invitation. Do not run out of money.
Don't use a battery approach. I want you to be empowered forever. So, employ the power
of a generator.