This knocks the socks off a 529 college savings plan.
In this episode, I'm going to address the question "What is the best way to save for children's
college?" Now, maybe you know what a 529 plan is. If you don't, I'll explain what it is.
But I would not recommend it because I'm going to show you something that is far better. It
has those benefits and a whole bunch more that most people don't even know are available to them
when you're saving money for a long-term goal like your children's college.
My name is Doug Andrew. I've been a financial strategist and retirement planning specialist
for more than 4 and a half decades. And I've been very blessed in my life to
educate thousands of people. I've authored 11 books thus far. And at the end of this episode,
I'm going to show you how you can receive a free copy of my most recent best-selling book. It's
over 300 pages of information and stories. But in this episode, I'm going to address what's far
better than a 529 college savings plan. What is a 529 plan? If you don't understand or you've never
heard of this, this is where the government allows you in section 529 of the internal revenue code
to be able to save money towards your children's college education. And it's sort of like an
IRA or 401K. It accumulates tax-free. And so, then you can go access the money. But there's a
lot of strings attached. Okay, what are those? You must use it for college education. If you
dip into it, you'll get penalized. You'll have to pay tax, if you use it for something else. There's
all these parameters, these strings attached. The benefit is it's tax advantaged. Well, my heavens.
My favorite financial instrument where I accumulate my serious cash... What's that?
Money I don't want to jeopardize or lose. I can use it for retirement, I can use it for business
working capital, I can use it for my real estate management. I can use it for emergency funds,
I can use it for estate planning. But I use it to accumulate money for my kids' college education.
And now, my 17 grandchildren. Now, I'm 68 years old. A lot of times, I will mentor troubled youth
and I don't disclose to them my age. But I do say, "Hi, I'm Doug Andrew. I'm at level 68. What level
are you at?" And they go, "14." Okay. So, maybe what does somebody at level 68 know that someone
at level 14 maybe doesn't know and what have you? At age 68, I now have 17 grandchildren. And this
is the way that we contribute towards college. And by the way, in our family bank is what I call it,
none of our 6 children or our now 17 grandchildren ever have been told that we're going to pay
for their college education. No, they have to have skin in the game. For every dollar they get in a
scholarship or they save towards college, we might match dollar for dollar up to one
P.HD or something. My kids were never told that we're going to pay for their college education.
They went out and they earned scholarships and they saved money and then they borrowed from the
family bank. And when they went out and started earning money, they paid the loan back. So,
that in our family bank their kids and grandkids can have the same resource. It's not a handout.
See, we believe in giving a hand up but never a handout. I talk about that in other episodes. But
when people say, "Well, I'm saving in 529 plans." I go, "Why would you want all those restrictions?
It's like you've got a straight jacket on with that money? I use my Laser Fund." What's that?
Well, it's a maximum-funded, tax-advantaged indexed universal life insurance contract. "What?
I've never seen a life insurance policy that performs very well." I go, "Well,
do you think that means it doesn't exist?" I often ask people who use that reasoning. Really? Because
you've never seen one perform well you don't think it exists. Have you ever seen your brain before?
Well, how do you know that exists? See, I have indexed universal life contracts that I have
owned. And thousands of people when it's been designed right that allows them to earn rates of
return between 6 to 10 percent average, tax-free. Now, some years, they have earned 25%, 55%. But
using indexing when the market is down, they've never lost a dime due to market volatility.
Because the money is not in the market. It's indexed to an index of their choice or indices
like the S&P500 or the Dow Jones. But if you think I'm talking about indexed mutual funds,
think again. This is a strategy this is where your money participates when the market goes up
but when the market goes down, you don't lose. Because your money's not really in the market.
It's safely tucked in an insurance company earning usually 4 or 5 percent tax-free. You
can opt anytime you want if you feel bullish about America to have the interest, 5%. If you have a
million bucks accumulated, 5% would be 50,000. You can just settle for the 50,000. Or you can say,
"Take the 50,000 of interest but don't risk my million. And pay me whatever the S&P does or
the Dow Jones or the Russell 2000 does this year." So, insurance company, this is a no-brainer. What
do they do with that 50 grand? They buy upside options. So that if the S&P goes up 10, the 50,000
doubles to 100,000. The insurance company pays me. But if the market crashes, the options expire
worthless but I didn't lose my million. Everybody else in America leaves their money in the market
and the million drops down to 600,000. I've never lost a dime due to market volatility
in what I call my Laser Fund. And so, I've earned average rates of return of 7 to 10 percent which
will double your money every 7 to 10 years. This knocks the socks off of IRAs or 401Ks. But why
would I use this for college funding? Because it accumulates tax-free, I can access it tax-free.
But I can use indexing and make more money and not lose when the market goes down.
I can put in way more money into a laser fund than you can put into a 529 plan you restricted.
I can make up for years that I didn't put in the maximum amount. You can't do that with a 529 plan.
I can access money for any reason. It doesn't have to be for college education.
Most of our children, they didn't have any debt or they paid for their college as they went.
And so, they had the money and they could use it to start a business. You can't do that with the
529 plan. I can use the money for whatever I want. But if I happen to die, it's self-completing.
What does that mean? But before I do that, if this is intriguing you
or maybe you know somebody who's contributing to a 529 plan, refer this video to them. Subscribe,
share and they can gain these insights, okay? If I put money into a max-funded insurance contract
and I accumulate the money and I use it tax-free for my children, my grandchildren's college
education, however you want to do it. Whether it's a matching, arrangement or what have you.
If I get killed in an accident or I pass away, everything in that account blossoms. For example,
I'm 68 right now. If I had a million in a plan or a 100,000, it doesn't matter. If I died, it would
blossom to about 2.5 million and transfer totally tax-free to my heirs. If that was earmarked for
college educations for the next 10 generations, it would keep blossoming. It would never run out. And
so, we have this and then when somebody passes away, we take 20% of that tax free lump sum and
we put it into the next Laser Fund. Every time the oldest person in the family passes away,
we get a tremendous infusion of tax-free cash to fund college education, military... I don't care
what it is. Retirement? For generations. We will never run out of money to help our children and
grandchild our posterity get their education with tax-free money. You can't do that with a 529 plan.
So, if this is intriguing you, I want to gift you a copy of my most recent best-selling 300-page
book, The Laser Fund. Again, I've been very blessed to have authored 11 books so far.
This is my most recent best-selling book. It's in its sixth printing. It's 300 pages. It's actually
two books in one. This one is about 14 chapters with 200 pages of information charts graphs and
explanations. This side is 12 chapters that contain 62 actual client stories. And there's
one chapter here that is just totally about how to use the laser fund for college funding.
I would recommend you read both. If you go to laserfund.com, LASER.com, you contribute a nominal
amount towards the shipping and handling and I'll cover the rest of that cost. And I will pay
for the book. There's options there to listen and learn watch and learn. But if you can't tell, I'm
passionate about empowering you with opportunities that maybe you didn't know existed before.