Welcome back. In this video, we're going to talk about what are tax free
investment options. This is important because when you can accumulate your
hard-earned money on a tax-favored basis, it will end up growing to more money. But
if it's tax-free when you take it out, you'll have higher net spendable
retirement income. So, we have to overcome some obstacles of the way people are
always thinking. The way they've always been taught is what they have been
thinking. And so, in this episode, I'm going to empower you to transform your
thinking, your money, the way you manage it and begin to convert to tax-free. And
sometimes that requires what we call a strategic rollout. If you stay with me to
the end, I'm going to teach you how to accumulate access and transfer your
money totally tax-free.
So, the most important point is to understand the power behind choosing
tax-free places to accumulate your money. Unfortunately a lot of people think tax
advantage savings is just a tax deferred IRA or 401k.
So, to understand what are the best options for tax-free investing. we need
to talk about why people get into the mentality that a tax deferred investment
like an IRA or 401k is about the only choice that we have. Actually that's not
the best way to save money. I have a little ditty that goes good better best.
Never let it rest how good gets better and better gets best. You know, I raised
in 401ks may be a good way to go. But I've always sort of said, "They're a far
cry from the best way to go." A Roth IRA or 401k is a step in the right direction.
It's a better way to go but do you know that I've never owned an IRA or 401k.
Never will. I've never owned a Roth IRA or 401k. Never will. My favorite vehicle
is totally tax free. And in other episode you can learn about what we call a rich
man's Roth and my favorite vehicle that is totally tax free. But we have
different choices. So, I teach this continuing education. It's advanced
continuing education to CPAs and tax attorneys. And oftentimes I will start out
with this riddle. You ready? See if you can figure this out. One day,
there were 3 fishermen that went out for a great day of fishing. And at the
end of the day, they decided to check into this little quaint Mountain Lodge.
And the clerk said, "Oh, we've got a room towards the back that has three beds in
it. It's 30 bucks. Well, that's easy. 3 men, $30. Each of the men
shells out $10. So far, so good. Well, they're getting settled back in
their room. And clerk is entering in the
books. And she goes, "Oh! We've been discounting that room during the remodel.
The installations out of the wall or whatever. They can hear the laundromat."
We've only been charging $25. So, she took five $1 bills out of the cash
register and she gave them to the bellboy. And said, "Would you go refund
these $5 to those three men?" So, the bellboy is walking back and he's
thinking, "Hmmm. How are 3 men going to divide up five $1 bills?" And he's not
very honest. So, he pockets 2 of the dollars. And he goes back and refunds a
dollar to each of the three men. So, let's do accounting. 3 men originally paid
10, right? They each got a dollar back. So they paid a net of 9. 3 men times
$9 equals $27. Plus the bellboy kept equals
$29. Where's the other dollar? 3 men originally paid 10.
They each got a dollar back. They paid a net of 9. 3 men times $9
equals 27. You add the 2, the bellboy kept equals
29. Where's the other dollar? Now, don't feel bad if I have you stumped.
Because this stumps CPAs. Okay. And they work with numbers all day long. No wonder
the general public sometimes gets confused. Do you know what I'm doing? See,
I'm tricking you. What I'm doing is I'm saying 3 men times 9 equals
27. But if I'm accounting for $30, see CPA is the first
thing they learn in accounting 101 is what are you accounting for. And number
2, are you adding or subtracting? Is it a debit or a credit? So, I'm adding the
2 the bell boy took. I should be subtracting that 2. 3
man times nine dollars there's 27 minus the 2, the bellboy kept equals the 25 which
is the price of the room. But if you're accounting for the $30, 3
men times 9 equals 27 plus the 3 they got back equals 30.
Now, if I can stump CPAs with that one because they'll pull out their slide
rule or their abacus try to figure this out some of them have calculators. And if
I can stump a CPA with that, no wonder people get duped into thinking. Hmm... Why
is it we add up what an IRA, 401K grows too. And we think that we should
choose investments that grow to the most. No. You should choose investments that
generate the most at the time in life you're going to need the money the most
after subtracting the negative impact of taxes and inflation. And I cover those on
how to eliminate those dangers in other episodes. So, what are the action steps
that you can take? Generally, there are 3 different types of investments
that people are aware of that have tax advantages. The first would be the tax
deferred IRA or 401k. As I explained in other episodes, you're getting a tax
break on a traditional IRA or 401k on the seed money, so to speak. And then
you're agreeing to pay tax when you harvest that. I use the farmer and the
seed analogy. You know, I'd rather just pay tax on the seed myself and enjoy the
harvest without tax in the fall of life, so to speak. And so, that is only deferred.
Then people end up paying taxes through their nose in retirement. Another tax
advantage vehicle would be municipal bonds. Now, municipal bonds are okay
except some municipalities are in trouble. So, I don't trust that my money
is all that safe in some municipal bonds depending upon the government or how
it's run. I've generally earned in my favorite vehicle which I call the laser
fund. 2 to 3 percent higher rates of return than most municipal bonds. Some
people say what about a Roth? Now, in other episodes, I talk about the 2
benefits of a Roth. You take after-tax money. And you accumulate it tax-free and
you can take it out tax-free. What I like is sometimes referred to by CPAs and tax
attorneys as a rich man's Roth. And in another episode, you'll be able to learn
about that. But see, I like to accumulate my money tax-free. Be able to access it
tax-free and when I die, I want it to increase in value double, triple maybe.
And transfer tax-free. In my other educational materials and my books, I
disclose that in the Internal Revenue Code for over a hundred years now, there
is only one vehicle that I have found that allows you to accumulate your money
tax-free. And then be able to access that money tax-free. And then when you die, it
blossoms in value and transfers tax-free. And I want you to learn about how to be
able to do that because you will actually achieve financial independence
much quicker and not worry about running out of money. So, why is this important?
Because I've noticed that sometimes people when they retire... Let's say they
need $100,000 to buy gas and groceries, prescriptions, golf
green fees and retirement in a year. So, they go to their IRA or 401k and they
withdraw 100,000. And then all of a sudden they're surprised because
they have to pay federal tax. Maybe of 25% on another 5, 6 or 7 percent
in state tax. So let's say a third. Just to round it. So, they only have 67,000 after
paying tax on the 100,000 withdrawal. They go, "Well, I needed
100,000." So, they go back and they withdraw another 33
thousand dollars. And they say, "Okay. Well, wait a minute. Now, we have to pay tax of
a third on that 33,000." 11. So, they go back because they're
11,000 short still. They go back and they get the 11,000. They're
coming back and they have to pay tax of a third of that. They're going back and
forth back and forth withdrawing money out of their IRA or 401k. And they begin
to realize, "Wait a minute. Every time I have money coming out, a third of it goes
out the window in taxes. How much do I need to withdraw in the first place so I
can net 100,000?" in a 33% tax bracket, you have to
pull out 50% more. You have to pull out 150,000.
Pay tax of 1/3. 50,000 to net 100,000. Do you know on
a million dollar nest egg? If you were earning 10% return, you'd be out
of money in 11 years. Because you have to pull out 50% more in a 33% tax
bracket to have the same net spendable income as a tax-free investment. Wouldn't
you like to be able to withdraw your 100,000 and it's tax-free? Then
you can spend 100,000. So, in my opinion, the best option is to
accumulate your money totally tax-free. Where you can
accumulate it tax-free, access your money tax-free during retirement and when you
finally pass away, whatever you leave behind blossoms increases in value and
transfers tax-free. Now, how do you do that? It's what I have called the laser
fund. And I wrote a book about it. This is my 11th book. The laser fund is really
the secret behind allowing your money to accumulate totally tax-free. But when you
take it out, it is tax-free. And if you pass away, it increases. Sometimes double
and triple and transfers income tax free. This is grandfathered under the Internal
Revenue Code. So, a lot of people like to learn more about this. And that's what
motivated me to write this book. It's actually two books in one. I would love
to have you receive a free copy. So, here's how. This first 200 pages will
empower you with charts and graphs of how to be able to convert to tax-free
income and diversify. You flip it over this direction and there's 100 pages
twelve chapters with 62 actual stories of people who have used this not just
for retirement. For college funding, for business planning and what have you. So,
if you click on the link below, you can obtain a free copy. Just pay a nominal
shipping and handling charge. Dive deep into this book and you'll see why the
laser fund is my favorite vehicle to accumulate money tax-free,
access it tax-free and whatever I leave behind, transfers income tax free.