This is phenomenal. In this episode, I'm going to address IUL multipliers. Earn double
what the market does. Sometimes people go, "Say what? That sounds too good to be true."
No, it isn't. Get ready to learn how you can do this.
So, my name's Doug Andrew. And I've helped people optimize their financial assets now for more
than 47 years. But also minimize unnecessary taxes and prepare for long-term more than 5 years down
the road type of financial goals like retirement; saving for college funding for their children or
grandchildren; real estate investors, business owners that want to manage their working capital
and have money liquid and safe earning predictable rates of return tax-free;
emergency funds. Whatever your goals are, people say, "Doug, where would you recommend we
park our money to have it grow safely tax-free but we want it liquid?" The ability to access money
when we need it with an electronic fence transfer phone call. And I go, "Well, this is where I keep
60% of my serious cash. It's what I call the Laser Fund." See, LASER is an acronym I came
up with years ago that stands for liquid assets safely earning returns. I want my money liquid so
I can get it. I want it safe. I don't want to lose money because of market volatility. And in a year
i make money, I want that money I just made to become newly protected principal. In other words,
I don't want to lose in future years money i made in past years. Does that make sense? Too many
financial advisors don't know how to do this. And I want to earn predictable rates of return
in the 8 to 10 percent range that are tax-free that historically stays ahead of inflation. So
that if inflation goes to 10, I'll earn 15. Okay? I teach this in my various books. And if you'll
stay with me to the end of this episode, I'll gift you a copy of my most recent bestselling book.
This episode is talking about my favorite instrument the Laser Fund. And I like to use
indexed universal life. Okay? Now, the Laser Fund is a properly structured, maximum-funded indexed
universal life insurance policy where I can link my returns to the index or indices of my choice
that the insurance company offers. Most insurance companies offer anywhere from 5, 10, to 15. Now,
I'm going to use an example in this particular case. And I cannot put this up on the screen. But
this particular company which is very strong, one of the leaders in indexed universal life,
here's an example of 3 different indices you can choose from for some or all of your money inside
your insurance policy. One is called the one-year no cap. So, you leave your money in and it's one
year. And they measure the growth of that index for one year and there is no cap. If it earns
60%, they'll pay you 60%. And we had clients that actually earned that here this year in this one.
Here's another one they call it the 2-year. So, this is where you link to an index and you wait
for 2 years and you measure the S&P or whatever index. And you measure the growth over 2 years
and sometimes they'll cap you at maybe 19%. The most they'll pay you is 19 over 2 years,
okay? So, that's called the 2-year point-to-point. And then there is another one that's very popular
and it's called the 5-year. So, that means you're picking a date today and you go link.
And you wait 5 years. And whatever the market is, if the S&P was a 2,000 and 5 years later
it's at 4,000, that's 100%. They're gonna pay you 100%. They're going to pay a double your money
over that 5-year period based upon where the index or the S&P is in relation to where it was 5 years
before. You don't know what you're going to earn until the end of the 5 years. So, people say,
"Which one shall I choose?" All of them. You diversify. So, I'm going to give you some
examples of this and then I want to blow your mind with what are called multipliers. So, get ready.
Now, you can't see this on the screen. I'm going to read from it because these insurance companies
that offer these have literature that explain this. So, this particular chart shows their policy
holders what they can choose from. And here's the one year point to point options. One with a cap,
a high cap, a high part, or no cap. So, you can choose any one of these 4 or you can choose
the 2-year, the 5-year, the 1-year over here. So, you can just choose. And so, what we're
going to do here is we're going to allocate 40% of the money to this one. The high cap, one-year.
Down here, we're going to allocate 40% to this one which is the 2-year that I talked about. You wait
2 years and we're going to allocate just 20 to the 5-year. And we're going to see what happens
based on actual history. Based upon even back testing for decades, okay? So,
as we go through this, what these insurance companies will do is they'll say based upon this,
we'll go clear back to when any of these indices started, 1979-1989. So, they take 10-year chunks
of time and they go, "Well, you would have earned 14 percent, 12, 15, 17, 15, 13, 15, 14, 17. Wow!
These are the actual returns you would have earned in these 10-year periods. And so, they can go back
and tell you. And you can see some of the worst years were maybe down around 4.9. That's still
5 times what banks are paying right now. And then you come here to the forward and here's
2006 to 2016. People say, "Well, what about recently?" Well, you would have averaged
8.26. You would have earned in 2007 to 2017. Based on that allocation, okay? 40, 40, 20.
8.46. 2008 to 2018, you would have had 11.72% rate of return. And 2009 to 2019, 11.19. Okay?
The average since 1979 using that allocation with indexing, you would have averaged 11.62%. And I
have naysayers that go, "I've never seen an insurance policy earn more than 3 or 4
percent." Evelen point 6. I've earned 11.17 and netted over 10% for 25 years. A million dollars
earns 11, nets 10. I can pull out 100 grand a year and never deplete principle. And people think I'm
making it up. Nope. That's called diversification. People say, "Well, should you diversify into
what else?" Inferior places like a bank or credit union? I'd rather put 40% in this one, 40% of
this one and 20 in this one. And diversify in superior vehicles. Why would you want to diversify
into some bank account crediting less than 1%. This is where banks take your money
and put it is over into the insurance industry. Did you know that? So, folks,
this chart I love because it shows that based upon what I just shared with you... If you diversified
40% to the one year, okay? Forty percent to the 2-year, 20% of the 5-year; 90% of history, you
would have earned at least 5.96%. In the market, you would only earn 0.68. Seventy-five percent of
the time you would have earned at least 8.12. Fifty percent of the time, 11.42%. That's not bad
odds. Twenty-five percent of the time you would have earned at least 15%. And 10% of the time,
you would have earned as high as 17. I'll take those odds. Ninety percent of the time, you'd earn
more than 5.96. And I have naysayers say, "I've never seen an insurance policy earn more than 4."
What? Then you haven't seen one of these. So, I say, "Take your head out of the sand." So,
if this is already intriguing you, hold on. I'm going to blow you away here. But you're
probably thinking of somebody who could really benefit from understanding this. So, please,
share this video. Please like, make a comment. But subscribe to 3-Dimensional Wealth. This channel I
post an in-depth answer to a financial question almost on a daily basis. This is not about me.
This is about you. I haven't done this since 2005 for clients. Ever since 2005, all I do is write
books and I create educational videos like this to help you. Be sure and subscribe to the channel.
Share it with others. But stay with me here to the end because I want to gift you a copy of my most
recent best-selling book so you'll understand and be able to read how this works. Now, all
I've been talking about is regular universal life where you can assign it to a 1-year with no cap.
And I have another episode that shows where many people locked in 61.33%. A half a million grew
to 1.3 million in 1 year from March of 2020 during the covid pandemic to one year later.
Because we watched these and my son said link for the one year when the market dropped 30 or
40 percent. And sure enough, they made 61% the next year after all fees. That's net.
Sixty-one percent. Here's an example. If you allocated 40% of your insurance policy cash
values in the one-year high cap index, okay? Now, sometimes you could get 11% as a cap. That means
the most they'll pay you is 11% a year. Because there's a trade-off there even if the market
goes up. And see, the one I quoted you at 61, that was no cap. Forty percent in the 2-year
that has a 19% cap. But 20% in the 5-year indexed. The average crediting rate, 11.3%
net over the long term periods ever since these indices have been around, okay? Here's
another one. About 50% in the 2-year. Nineteen percent cap, 50% in the 5-year with no cap.
The average return is 14%. Crediting rate, net after all multipliers and everything.
Now, what's a multiplier? You can enhance those rates of return by using a multiplier. If you
link to an index, all the insurance company is doing is taking the interest that the general
account portfolio is credited. So, let's say you have a million dollars of cash value.
And their general account portfolio crediting rate is 4%, that's 40,000. You can settle for 4% if you
want if you feel bearish about America. Anytime you want. But if you feel bullish about America,
you say link. Your million has to stay safe in the insurance company earning 4.
What you're relinquishing is the 4% interest. You say to the insurance company, "You can take
the 4% interest on my million. But don't risk my million. Keep it safe. Take the 4% of the 40,000
and do whatever you want to do with that so you'll have the wherewithal to pay me whatever the index
that you offer ends up doing." So, what do they do with that 40,000? It is for an options budget.
So, you can take the 40,000. And that's why they buy upside options and that's
why if the market goes up 8, they can pay you 8%. If it goes up 12, they pay you 12%.
But if the market crashes, your options expire worthless but you didn't lose your million.
When the market goes up, you benefit. When the market goes down, you don't lose
because your money's not in the market. Does that make sense? If not, you need to read this book.
Here is a multiplier. The insurance company says if you're savvy
and you can really tell because it's an election year or something and a lot of politicians do
all kinds of smoke and mirrors with a fiscal and monetary policy to get reelected, right?
And so, whenever there's been an election year, I'll usually go, "You know what? You can take
another 7.5% of my million". Seventy-five thousand? Yep. You can take another 7.5%.
They call it a fee but all I'm doing is saying you can take another 7.5% of my million on top of the
4 percent for an options budget. Now, they can buy way more options and they will pay me 2.7 times
whatever the market does. If the market goes up just 10, I get 27. Now, if I subtract the fee,
I netted 19.5%. But I'm earning nearly 20% by doing that. So, in the example that I gave,
the clients who earned 61% who chose a multiplier, they got 2.7 times 61%. They got a 165% return
by allocating 7.5% to increase the options budget. That's what a multiplier can do.
I hope this is blowing you away. Well, what if you want don't want to do that much? Well,
you could allocate 5%. So, if you have a million bucks, you could allocate 5% or 50,000.
For the options budget, now they have 50,000 on top of the 40,000 which is what they have
anyway because they're earning 4% on your money. And they'll pay you 2.14 times the multiplier.
So, if the market went up 10, you're going to get credited 21.4. Less the 5% which
was the option budget. This is how people get double the return of whatever the market did.
Double. So, if this is a rousing curiosity and you would like to earn as much as double
of what the market actually does without the risk if the market crashed,
the most you would give up is 7.5%. There are people who lost 33 and 40 percent of their money.
You don't have to. If you really want to go for it, the most you would lose would be 5%
or 7.5% of your million if you went for it. But the upside is you'll get double
what the market does if the market goes up. That's called a multiplier.
Now, do you want to learn more? Let me show you how you can read and empower yourself with this
wisdom. So, if you would like to learn more about indexing and see actual examples and listen or
read stories, I would encourage you to read the book The LASER Fund or get the audio version.
But I'll gift you a free copy. You don't need to go buy it. If you go to laserfund, LASERfund.com.
What's the Laser Fund? It is a max funded index universal life. But it has to be structured
properly and funded correctly to perform like I've been showing. And you'll learn about how to
be able to diversify with different indices and to be able to get the kinds of rates of return
that i've been showing you here. And you can watch other episodes on this channel to see those actual
rates of return. And then you can also learn about multipliers if you want to go for it with far less
risk than having your money exposed in the market. But if you go to laserfund.com, all you do is
contribute a nominal amount towards the shipping and handling. I'll cover the rest of that cost
and I'll pay for the book and fire out a copy for you. There's 200 pages here with charts
graphs and explanations. You flip the book over and there's another 100 pages with 62
actual client stories of how to accumulate, access, and transfer your money tax-free
at safe rates of return that historically has beaten inflation. This is to your brighter future.