10 reasons why everybody isn't doing this. In this episode, we're going to
address the question "Why didn't my advisor tell me about this?" What's THIS? A
max-funded indexed universal life insurance contract. This is episode 19 of
21 in a series called Secrets To A Tax-Free Retirement. I would advise that
you watch the entire series. If you've already watched the other 18 previous
episodes, congratulations. But I want to empower you and be able to understand
"Golly, why isn't everybody doing this?" Because I've been asked that question a
gazillion times. And I'm not exaggerating.
So, my name is Doug Andrew and I've been a financial strategist and helping
people plan for a safe retirement for more than 45 years. I wish I had a nickel
for every time somebody has asked me the question. "Well, if this is so good. Why
isn't everybody doing this?" So, I finally created a list of 10 reasons why
everybody isn't doing this. But it's interesting back when I self-published
my first book and then started going through about 5,000 copies a
month which I didn't know was bestseller status. It got the attention of Time
Warner. And so, Warner business books bought the rights to that book and also
commissioned me to write several more. My third book became a New York Times Wall
Street Journal number one bestseller. Now, my 11th book is titled The Laser Fund
because it's my favorite vehicle. And in this book, I disclosed the 10 reasons
why everybody isn't doing this. But I'll never forget the day I was in a
skyscraper in New York with Time Warner talking to the number 1 business
editor in the world Mr. Rick Wolff. And he's the one that was so convinced, "Doug,
you have got to write a book someday titled
Why Didn't My Advisor Tell Me About This?" Because he read my book and he was
editor of many many best-selling business books. And he says, "Doug, your
concept here is so incredible. Why doesn't everybody do this?" I said, "Because
they don't know what they don't know." I'll repeat a statement a quote that I
put in my very first book. "The worst form of ignorance is when we reject something
that we know very little or nothing about." That's an anonymous quote. I don't
know who made it. But all too often, sometimes advisor will say, "Well, I've
never seen an insurance policy that does that." And so, they think it doesn't exist.
And it's like, "Really? That your reasoning?" Have you ever seen your brain? How do you
know that exists? That's pretty stupid reasoning, okay? And so,
I put together the list of 10 reasons why everybody isn't doing this. And I'll
go down through them with you right out of the book. As I share these reasons
with you, if you would like a little bit more detail. At the end of this episode,
I'll show you how you can get a free copy of this book. I'll send it to you.
You pay ship shipping and handling $5.95. I'll pay for the book and
I'll fire it out to you so you can learn even more details about this incredible
instrument that I've used for more than 45 years to accumulate access and
transfer my money totally tax-free. I just want you to know that people like
Walt Disney, JC Penney, Ray Kroc. I think he was the originator of McDonald's. These
types of people have used a life insurance to be able to save their
companies in dire circumstances or to be able to start their businesses.
David Walker who was the Comptroller of the United States, the general
Accountability Office who resigned actually during the Obama administration
because he wanted to tell the public the truth back in 2008 about how much
serious trouble we were really in in this country. We were on the verge of
collapse. And they would not let him tell Americans how serious of trouble we were
in. So, he resigned. And he went out and he became a huge proponent of keeping your
serious money in maximum-funded insurance contracts for liquidity, safety,
and predictable rates of return. So, what do they know that maybe you don't know
or that most Americans don't know? And why isn't everybody doing this? So, in the
book in Chapter 11, it's actually titled, "Why isn't everybody doing this?" And I'll
highlight the 10 reasons. Number 1 would be lack of awareness. People just
don't know what they don't know. And it's because most advisors are not taught
these concepts because most advisors are selling stocks and bonds and mutual
funds and the the brokerage firms make their money by them churning your money
and they continually earned fees by doing that. Or if you invest a half a
million. And that half million grows over 30 years to 8 million like money does
inside of an insurance contract. They continue to take out 1% a year on your
money as it grows. I mean, that would be like buying a house. And the realtor says,
"You know what? You can either pay me 6% one time on a $500,000 house. That'd be
30,000." And I don't make $30,000 when I set up a $500,000 insurance bucket. But
I'm using this as an example. If the realtor says, "I'll charge you 6%
once or you can pay me 1% of the value of this house as it goes up in
value every year the rest of your life." Would you do that? But that's what people
do with asset managers. They continue to pay 1% as it grows. And even though they
say, "Oh, that's the cheapest. Insurance policies are expensive." No, they're not.
You might pay 20,000 and fees to set one up as the new money goes in and that's
it. If you have assets under management, at the end of the day, over 30 years,
you'll pay about a million dollars in fees. These are the most least expensive
vehicles you can have. But it's just lack of awareness. The second reason is the
path of least resistance. When you go through and study and watch these
episodes, you'll understand that you have to structure it in accordance with IRS
guidelines. To be tax free under Section 72 E, 7702 and 101 A. In compliance with
tax citations Tefra, Defra and Tamra. So, you have to know what you're doing. If
you bugger it up, you could trigger unnecessary tax. Most of these firms do
not want to be held liable for that so they don't even train their advisors on
how to set it up so they don't know what they don't know. They have lack of
awareness. That's why many of them say, "Well, I've never seen one that does that."
Because they've never been taught. I have trained over 3000 CPAs, tax attorneys,
financial advisers and they would come through for 3 days, pay 6 grand. They
would sit there with their mouths open. Because unfortunately, CPAs and tax
attorneys do not to know this --tax-free vehicle to get
their LLM degree which is a master's in taxation. And so they would hire me to
come and teach them advanced continuing education. And they would go, "I didn't
know that." TThe third reason it's too much work.
It takes quite a bit of time to set these up. This isn't a slam-bam-thank-you-
ma'am, what's your name, address, social security number, make out a check to this
mutual fund type of a transaction. This is a transformational experience that
takes a minimum of 5 years to comply with Tefra, Defra, Tamra so that your
grandfather to have tax-free income. Many banks and credit unions don't even have
the confidence that the in-house adviser is even going to be there in 5 years.
So, they don't want to sell any product that requires a relationship
of somebody watching out for them. They want a transaction. You write out a check
and they're done. And so, it's too much work for most firms. Number 4, selling
clubs versus teaching the swing. See, it's not so much in the commodity. Sometimes
people say, "Well, I chose the same company. I chose the same product and then they
come back 5-10 years later. And their money is worth half as much when it
should have doubled." And I go, "Let me see." And I it takes me about one minute to
look through and I go, "Who set this up?" "Well, our brother-in-law, our nephew."
"Didn't they use the same company you use? Didn't they use your same product?" I go,
"Yeah. But they had no clue what they were doing." They were using the commodity
product. They were not using the swing. It's like if you were going to be playing
in a golf tournament and you have the choice of using a professional golfer
like phil Mickelson's swing or you could use as clubs, what would you choose? Most
financial advisors focus on the golf clubs or by this mutual fund or by the
stalker bond. Or a gold or silver. It's not in the commodity, folks. It's in the
strategy. Indexing is a strategy not a commodity. The fifth reason is is not as
lucrative. As I mentioned, sometimes they would rather make 1% on your
money as it grows the rest of your life. And they did
have this lifetime income. Whether you make money or not, they get to charge you
1%. Whereas the insurance contract, you might make a little bit more on the
front end. But over the long run, would you rather pay 20,000 or would
you rather pay a million in fees? So, it's not as lucrative. The sixth reason: Well, a
lot of advisers are taught, "You should only have so much money in insurance."
Folks, don't look at what it is. Look at what it does. I will take as much
insurance as I can get if it doesn't cost me anything net. Because what I'm
doing is I'm using the insurance for a living benefit. If your employer came to
you and said, "Hey, we have some free benefits this year. We've got free life
insurance. How much would you like?" No. Most people say, "Wait a minute. It's free?
I'll take as much as I can get." We don't object to the insurance benefits we
object to paying for it. If I can have my insurance paid for with a minuscule
portion of interest that would otherwise go out the window in unnecessary income
tax, I'll take as much as I can get because it's not really a cost. I make
money at the end of the day. I'm earning 11 netting 10. And when I die, whatever is
left behind blossoms and transfers tax-free. That doesn't sound like a cost
to me. Let me go through the final reasons why everybody isn't doing this.
The seventh reason is people say, "Well, isn't insurance too expensive? It gets
really expensive as you get older." If you've watched these episodes, you will
understand that when it's structured properly, the cost of the insurance goes
down as you get older. It becomes cheaper as you get older. The policies I've had
for 30 and 35 years cost one twentieth what they did when I started out with
them. Because the amount of insurance at risk to the insurance company is one
twentieth what it was when I started. Because I've self-insured. So, this
actually gets cheaper as you get older. But most people think well the older you
are, the more expensive insurance is. Not if you structure it the way we teach in
this book and with these strategies that I'm explaining in this
course. The eighth reason dye everybody isn't doing this. "Isn't this just for the
wealthy?" Well, yeah the wealthy do this. This is where wealthy people put their
money. This is how millionaires and billionaires manage their money. They
keep their money inside of these tax-free vehicles earning rates of
return of 10, 20, 25 percent during the up years. But they don't lose
one when the markets go down. But they leverage. And so, they will keep their
serious cash liquid and safe in the insurance contracts. They will borrow out
the money at 5% and keep earning 10, 15 and 20 percent. And they use
the money as their own banker and buy in real estate or investments or in working
their business. But this is where they put their money. But you don't have to be
wealthy. See ,this knocks the socks off of a Roth. But a lot of CPAs say, "Well, golly.
This Laser Fund, this max-funded insurance contract is the Rich Man's
Roth." And I snicker, "Well, yeah. Because you don't have to be rich to own one." But see,
the rich can't own a Roth. They make too much money. This has the benefits of a
Roth. And for additional benefits that I've explained in other episodes. And so,
this is not just for the wealthy. I can start this out for 500 bucks a
month. 35, 40 years ago, I started them on my children for
$25 a month when they were born. It's not what you begin with
it counts. It's what you end up with. The ninth reason hardly anyone is doing this,
right? Oh, so unless you follow the herd, you're
uncomfortable? Actually in my circles, hundreds of thousands of
people are doing this. But unfortunately a lot of people don't know what they
don't know. They tune in to CNBC. And who's funding CNBC? Tax revenuers. So,
they're gonna tell you to put your money in the market and tax-deferred IRAs or
401Ks. But really savvy people are doing this. The circles I'm in, this is
the preferred instrument. And so a lot of people are doing this. The tenth reason,
"If it's so good, why don't you call it an
investment?" I've explained that in previous episodes because if it's an investment,
the IRS basically says it's taxed. Sooner or later under this portion of the
Internal Revenue Code. I don't want it to be deemed an investment. I want it to be
tax-free under the insurance portion of the code section 72 E 7702 and 101 A. Also,
investments are generally subject to volatility. I want to have my money safe.
And when the markets crash, I don't want to lose. So, I'm okay. In fact, we have to
have disclaimers life insurance structured like I'm talking about. I
should not be purchased as an investment. And accordingly should not be purchased
as an investment because it's not. It's an insurance contract and that allows
the tax-free accumulation access and transfer totally income tax-free. So, this
has been episode 19 of 21. I would recommend you watch this episode next on
certain questions you want to ask an advisor to see if they understand this.
But if you would like to learn even more, I will gift you a free copy of this 300-
paged book The Laser Fund. You just go to laserfund.com to claim your free copy.
You pay $5.95 shipping and handling. I'll pay for the book. I'll send
it out to you. There's also options to get the audio version and an 18 hour
master class. But finish this free course. Get the book. Study, learn, watch, listen
and empower yourself for your brighter future.