Diversify using 2-5 superior money accumulation vehicles.
In this episode, I'm going to address the question.
How do you diversify using different indexed universal life insurance accounts?
Get ready, you'll going to understand some options here that maybe have never been explained
to you before.
So, my name is Doug Andrew and I've helped many thousands of people save for long-term
goals.
That's any financial goals that are 5 years further than the road and that usually go
to retirement or saving for college for children or grandchildren.
Any goal that is five years or longer down the road that you want to accumulate serious
cash and not jeopardize it.
Now, if you've watched other episodes on this channel or read any of my books.
I've been very honored and blessed frankly to have 12 best-selling books.
One became in New York Times and Wall Street Journal.
Number one bestseller in the second week it was released back in 2007 it's called Last
Chance Millionaire.
My very first book I self-published and I got the attention of Time Warner called Misfortune.
Because of the fortunes, people miss out on coz they simply don't know what they don't
know.
So, my purpose in these episodes is to enlighten you.
To give you some aha's epiphany's on opportunities you never know existed before.
So, in this particular episode, I'm gonna show you how to diversify using superior vehicles.
Why?
Because I'm a financial strategist.
I've watched many financial planners who say, "Well, you should not have your... all your
eggs in one basket", you've heard that right?
And so, they almost proposed that you spread your money around to different baskets that
are actually inferior.
In other words, it would be like saying, put your eggs in a basket and let's add some rocks
over in this basket, and so forth it's rocks.
Well, yeah because they'll break.
In other words, they don't match up to inflation.
You can't believe how many people think that diversifying means, "Oh, I should have this
much money in bank or credit union because it's diversifying."
So, how much is the bank or credit union pay you?
Well, less than 1%.
Yeah, you're rowing upstream with the rate of 1 mile an hour on the bank and credit union
and the current inflation coming at 3, 4, 5.
Actually, 8, 9, 10, or 11 at the true rate of inflation.
You're going backward fast.
Well, but am I supposed to diversify?
A bank is safe, right?
I go, yeah banks are very safe because of FTIC but do you know they can technically
say no if you went to withdraw your money for up to 6 months if things can really get
bad.
Why don't you put your money where your bank is putting your money?
Where's that?
Well, besides loaning that to people.
They take about 30% of their tier 1 assets that's money to have liquid on hand in case
they run on their bank and they put it on the insurance industry.
Why?
Because the insurance industry, legal insurance companies are usually rated 5 or 6 notches
higher in safety.
Triple-A compared to many banks they're only rated Triple-B that 6 notch is higher in safety.
They would increase their safety and the rate of return by 5 times.
They pay you 1% and they turn around you put a million dollars in a bank or credit union
they pay you 10,000.
They have to put that million and put it into an insurance company earning 5% or 50,000.
How much more is 50,000 than 10,000.
It's not 4% higher interest it's 5 times.
Would you hire an employee for 10 grand?
They make you an extra 50 grand?
Would you buy a [inaudible] machine for 10,000, they made you an extra 50,000?
So, just bypass the middle man and put your money directly into the place where the bank
put their money for liquidity and safety.
So, when people begin to understand that they realize maximum funded indexed universal life
insurance policy is the only vehicle in the internal revenue code that allows you to accumulate
your money tax-free.
Access your money tax-free all through retirement and if you do it smart without depleting principle
and when your old and you die whatever is left behind blossoms and transfers tax-free
to your spouse, your kids, your grandkids.
Nothing else does that.
But the average return that I've achieved has been 7.23 and 10.07 many years I've earned
way more than that.
But there's a lot of advisors who put your money in mutual funds and they go, "I've never
seen an insurance policy do that".
that's because unfortunately most universal life policies, most whole life policies are
not designed for living benefits.
When you have it structured properly and funded correctly it is qualified to be a laser fund,
liquid assets safely earning returns.
Spells that acronym LASER.
So, the next question people ask me.
Well, how do I diversify inside of the portfolio of laser fund.
I agree, those are superior vehicles.
Well, you can diversify in all kinds of ways.
Here we go.
So, before I go any further.
I'm not gonna spend any time talking about indexing is if you're not sure be sure and
subscribe to this channel and share this video.
Look at the other ones that I have that talk about indexing.
I'm going to assume your sort of assume what indexing is.
Coz I'm now gonna talk about how to diversify with your universal life policy using different
indexing strategies.
Now, how do you diversify?
You want to diversify with superior vehicles, not with inferior vehicles that pay very low
rates of return.
That are not liquid and a lot of times people don't understand when you diversify you wanna
diversify amongst superior vehicles.
In a nutshell, I have many universal life policies on me.
I have some on my wife.
I have some on my kids and now my grandkids.
I have some with this company...
So, I diversify like that but with a specific company or one or two companies, they offer
all kinds of indexes that I can link to.
The S&P 500, maybe the Nasdaq, Russell 2000, Dow Jones.
But the linking strategies and the participation rates also allowed me to diversify.
So, let's start out simple here.
First, for years, I have had clients who are diversified, and maybe they would go into
one that has a 100% participation rate with a 13% cap.
This was back in 1997 to 2012 about 15 year period.
The average return over the 30 years historical is 8.11 and then some they would take a 2%
guarantee but the cap come down and that's 7.73.
They might put 20% of their money let's say they have a million-dollar in their policy
and they put 20% on each one of this.
Here's a zero percent floor, in other words, zero is your hero.
This one averages 7.4 they cap at 11.2 at that time but they pay a 140% participation
rate.
Here's zero percent for a 16% cap that is 8.85.
Another one no cap and the participation rate was only 65% back then on that one.
So, you can average but you can sort of average those and there you go.
You have between 7.50, 8.50 even a 9 percent average rate of return.
So, sometimes people diversify and those are different companies with different types of
indexing strategies.
Now, a lot of times people will use the same company and this is the [inaudible] statement.
You cant see this I'm gonna read it to you.
I'm holding it up because this is for real.
Sometimes we have critics that say, "I've never seen an example of an actual client
who has this rate of return."
Well, here's the actual annual statement of this client.
So, let me show you the rate of return.
These are all of the indexes I think it's 15 that they could choose with that particular
company and this particular person had $76,749.
It was exactly 20% of how much money they had in their universal life policies at the
beginning of the year.
And so, they allocated 76,000 into one strategy and another 76,000 like they have 5 times
much in their policy is what I mean.
And so, over here I've indicated they diversified 20% into that Barclays U.S Dynamic Balance
Index, and that year they earned 13.65% $12,323.
They had another 20%, in other words, $76,000 in the S&P 500, and that was 11% so they got
$9,933.
They had another 20% in Nasdaq, they got 9.5% they receive $8,500.
They had another 20% of their money to what's called the blended index and that year they
got 15% that was $13,546.
The last 20%, the last 76,000 just in the company earning the general account portfolio
rate of 4.4% value.
So you add all those up and you average 10.71%.
That year tax-free rate of return by having 20% of their money each of 5 different places.
Four in index account and one just sitting in the insurance company earning the general
cap performing rate of 4.4%.
That's diversifying smart with one company 5 different baskets.
Does that make sense?
In this very channel, I have talked about different strategies like 1 year point to
point.
I made 1 year point to point with no cap and theres a threshold of spread or maybe 2 year
point ot point or the 5 year point to point last year average.
So, let's say you allocated 40% in a 1 year high cap index with 11% cap.
40% in a 2 year indexed account with a 19% cap and 20% in a 5 year indexed account with
no cap.
My sons who are IUL professionals.
They have diversified many of their clients like this 40, 40, 40.
Do you know that the average crediting rate has been 11.35% over 20 year period by using
that allocation.
You can go to sleep [inaudible] and wake up 20 years later and what you return do I get,
"Oh man, the market has been tough for the last 20 years.
Man, we've had the 911 tourist attack and the 2008 mortgage melt down and the covid
pandemic and the market is just crazy", some of the people is just glad ot have their money
back and you look you've been avergaing 11.3% because you did this 20 years ago and you
feel asleep and you woke up and 11% a year.
11 into that number 72 your money is gonna double about every 6-7 years.
Not bad.
Here is one of it.
I've used it in another episode.
If you have allocated 50% in a 2 year indexed account with a 19% cap and 50% in the 5 year
indexes account with no cap.
The average crediting rate net over the long term with this based on actual history would
be 14% average crediting rate.
Now, we cant predict that for the future but thats the advantage of diversfying in superior
vehicles rather than thinking that allocating some of your money in a bank or credit union
earning 1% it satisfies diversification.
The money is more liquid and more safe in the insurance company [inaudible] and you
can access it easier faster with electronic transfer of phone call out of an IUL.
Then you can from a bank or credit even if they have a drive up window.
Coz they could tell you a [inaudible] for 6 months if things got really bad.
A lot of people dont do that.
So folks, if this is intriguing you wnat to learn more.
The best way I recommend is to read.
If you like to read and learn.
If you like to listen and learn or watch and learn.
I have all kinds of education videos.
I have audio books.
But I wanna gift you a copy of my most recent best selling book the later fund.
It talks about indexing in all kinds of details and when you structure it correctly the advantages
on a maximum index universal life is you cna link your return to teh market.
But if the market crashes you dont lose.
Zero is your hero.
But you can participate sometimes more than 100% when the market is goes up.
So you have upside potential but you are potected in the downside if the market crashes.
This is what allows you to earn predictable rates of return and you diversify amongst
various indexing strategies or companies or someone your spouse.
That's how you diversify in order to have a superior average rates of return rather
than thinking.
Well, I'm gonna put my eggs in a few baskets over here in a bank or credit union.
I dont think thats smart when you relaly understand liquidity, safety, and predictable rates of
returns tax-free.
The bank is not going to pay you tax-free rates of return unless you bought bonds from
them and they do not pay that much of interest.
If you like to claim your free copy go to lasefund.com.
Click on the link below contribute a nominal amount of shipping and handling.
I'll fire out a copy to you and you can listen and learn, watch and learn and there's also
opportunities to be notified when we teach educational webinars.
We do it all the time because my purpose is to empower you to take ownership of your brighter
future.