- Earn tax-free returns on your working capital:
How savvy business owners use max-funded IUL
as a working capital account?
Get ready. This is gonna blow you away.
(upbeat music)
So my name's Doug Andrew,
and I've been a financial strategist
and retirement planning specialist now
for north of 48 years,
and I've been very passionate
about helping people optimize their assets, minimize taxes,
and empower what I call their authentic wealth.
Among thousands of people that I've been blessed to help,
many of them are business owners,
and when I teach them about
the merits of max-funded indexed universal life insurance
all of a sudden, the light bulbs go on, and they go,
"Wow! I want to use this as a working capital account."
So let me explain to you
why this is an incredible dream solution
for working capital for a business owner
or even a real estate investor.
So here's how money works:
when you have your money,
you're working capital on hand,
a lot of business owners,
they're so busy running their business
that they put the money in a bank,
or a credit union thinking,
"Well, it's liquid.
It's over here.
It's safe."
Well, what's a banker credit union giving you?
Like, less than 1%?
That's not very smart
just because you want it convenient
where you can access the money.
So when I introduce them
to the max-funded indexed universal life insurance policies,
a lot of people don't realize
that when you put in the most money
into one of these contracts,
that the IRS allows
and you take the least amount of death benefit
that the IRS will let you get away with,
which is actually
the idea that was originated back in 1980 by EF Hutton,
and they weren't an insurance company,
they were a brokerage firm.
The reason why they came up with this
is because a lot of people that had money in the market,
they had to time it,
and business owners don't like to have their money
in a volatile market
because if it crashes,
you don't wanna take the money out.
It's not liquid.
Sometimes you have to wait
to be able to sell and what have you.
And so, EF Hutton said,
"What are we thinking?
Why don't we have people put their serious cash?
Money earmarked for retirement and so forth;
that can be long-term goals,
but what about short term goals
like an emergency fund
or a working capital slush fund for your business?
Why don't we put it in an insurance company?"
Now the multi-trillion dollar insurance industry
is not only the backbone of America,
but it's the backbone of the world.
This is where banks and credit unions put 30 to 40%
of their Tier 1 assets for liquidity and safety.
So in The Great Depression,
we had banks that closed.
40% never reopened again.
Some real estate dropped 80%.
But do you know there was not one
legal reserve insurance company
that went under The Great Depression?
They came through with flying colors
crediting two, three, 4%.
And when we had our financial crisis in 2008,
do you know how many banks went under?
Over 400.
900 more were on the watch-list:
the brink of going under.
That's when the federal government asked
the five major banks in America
to disclose where they had their Tier 1 assets
for liquidity and safety?
Guess where they had their Tier 1 assets?
In the multi-trillion dollar insurance industry,
in BOLI:
Bank-Owned Life Insurance.
Corporations have it in COLI:
Corporate-Owned Life Insurance.
This is where I keep my corporate assets.
So, if you understand what I'm saying,
banks, they pay, let's say, 1% interest.
Let's say you have a million dollar working capital account
to be able to use in your business
for emergencies or things that come up or buy inventory
what have you,
and you have a million bucks sitting
in a bank earning 1%.
That's $10,000 a year.
Do you know what your bank is doing with that million bucks?
They're putting some of that into insurance companies
earning four or 5% or higher.
How much more is five than one?
Don't say four.
It's 500% more.
It's five times more.
They're paying you 10,000 a year in interest,
and they're turning around
and making 50,000 a year in interest.
But guess what?
They're increasing the liquidity and safety
because most of these insurance companies
are rated five or six notches higher in safety
than the bank is.
So that's why I say, "Let's just bypass to the middleman."
Let's put your working capital into the insurance companies
where the banks put a lot of theirs,
and we increase the safety
from maybe triple B up to triple A,
and so, the safety's greater,
but the rate of return can be four or five times.
So let's use a few examples
of how business owners actually do this.
This is called becoming your own banker.
So I have several business owners as clients:
back in 2017,
many of them who had money deposited
in their indexed universal life insurance policies
had a million, 2 million, or whatever.
Let's just use a million dollar example.
So I had a business owner that needed some capital
as an earnest money agreement to tie up a piece of property
they were gonna fix up and flip and sell.
He called me and said,
"Doug, I need a million bucks
out of my indexed universal life policy.
Send me over that form."
It's one page.
So he puts his name
and his policy number,
account number,
I think, okay?
And it asked, "Would you like to withdraw a million
or borrow a million?"
Which one do you think he checks?
He's savvy.
He borrows a million.
Now he has two choices:
he can borrow a million dollars
because the insurance company has a million dollars
of his money as collateral,
and he can have them charge him 2%
because loan proceeds are not taxable income.
They charge him 2%,
but they credit him 2%
on the money he left in the insurance company.
That's called a zero wash loan.
But most of our business owners,
they will use an indexed loan.
So he said, "You can charge me four or 5%."
Why would you do that?
5% on a million dollars is 50 grand a year.
It's because now they will credit him
on the million dollars of collateral:
whatever the index does that year.
In 2017, it was 25%.
It capped out.
Hello.
He made 250,000 tax-free on his million as collateral
minus the $50,000 of interest they charged.
He didn't have to write out that check.
They just deducted it.
He netted 20%
or 200,000 tax-free
on the million in his policy
while he was technically using it
in his business that year.
And he ended up making another two
or 3 million using it in his business.
That's a working capital account.
We have business owners that in 2020,
because of the COVID-19 pandemic,
in March of 2020,
when the market dropped 30%,
my son advised a business owner
a link to a one year point-to-point with no cap.
What that meant was,
a year later, in March of 2021,
the market was up 66.33%
from March of 2020.
So by doing that,
there was no cap.
They charge a 5% spread.
So he netted 61.33% tax-free.
He started out in March of 2020 with 850,000
in his IUL policy.
One year later, he had 1,382,000,
and he locked in that gain,
meaning if the market crashed after that,
he doesn't lose the more than a half a million
he made in that year.
That's called lock in and reset.
If this is blowing you away,
here's how you can learn more.
My most recent best-selling book is called "The Laser Fund."
It's actually two books in one.
This side is about 200 pages, 14 chapters
with all kinds of charts
and graphs and explanations
for the left brain thinker.
If you're more of a right brain learner or thinker,
you flip the book over and read this one.
This is about a hundred pages, 12 chapters
with 62 chicken soup for the financial soul stories.
If you want to use your whole brain:
left brain and right brain,
I would recommend you read both of these.
I want to gift you a copy.
So here's how you can claim your free copy.
Simply go to laserfund.com,
L-A-S-E-R fund.com,
or click on the link below,
and you contribute a nominal amount
towards the shipping and handling.
I'll cover the rest of that,
and I will pay for the book.
I'll fire out a copy to you.
There's also options there to listen and learn,
watch and learn.
There's even an 18 hour master class,
and then I want you to check out
some of the educational webinars and seminars
that we've put on.
So here is to your brighter future.
Go to laserfund.com.
(bright music)