It's not in a bank or credit union. In this episode, I'm going to address the question,
"Where is the safest place to put money?" And it's not where you think. So, put on your seat belt.
I'm going to blow you away with opportunities that you probably didn't know existed to
increase the safety, the liquidity, and the rate of return and tax benefits on your serious cash.
So, what do I know? I'm Doug Andrew and I've been a financial strategist and retirement
planning specialist for more than 4 and a half decades helping people optimize their financial
assets and minimize taxes, empower their wealth. And a lot of times people ask me this question,
"So, Where's the safest place to put my money?" And they think it's probably in a bank or a credit
union. Why? Well, because you have FDIC insurance. Now, I have other episodes that talk about
FDIC insurance came about because when the great depression occurred, there was a tremendous run
on the banks. And so, banks closed their doors. They didn't have liquid money. They don't have
money sitting in a vault. They loaned it back out again they can't just call all those loans due.
And that's why FDIC insures so that if there's a run on the bank, the federal government assures
Americans that they will back that up. Now, banks still have to have reserves on hand. And so,
in the great depression, 40% of those banks never reopened their doors again. We fast forward. And
most of the time banks have been faring pretty well. But in 2008, during the mortgage meltdown,
we had a tremendous uh run on banks again. They couldn't call all the loans due. And so,
there were about 400 banks that went under in America. About 900 more were on the brink of going
under. And so, the federal government asked the 5 major banks where they had their tier one assets.
That's money they have to have on hand liquid and safe. They don't need to rely on calling loans
due on mortgages because they used to be able to do that. They can't do that anymore. They can't
just call you up and say, "We've decided to call your mortgage due." See, they used to be able to
do that a long time ago. So, they have to have money on hand liquid and safe. So, they asked
the 5 major banks "Where do you have that money?" Guess where they have 30 to 40 percent of it? In
the legal reserve insurance industry. They take your money and they put a portion of it in the
multi-trillion dollar insurance industry and they actually increase their rate of return by 5 times.
They're paying us what 1%. And they're earning an average of 5% by taking your money and putting it
into these institutions. They're also increasing the safety dramatically. So, let's talk about
safety. That's what this episode is all about. And when we talk about the word safety, there's
2 different directions, okay? One is safety of the institution. You want to have an institution
that's very strong. And that's why the legal reserve insurance industry which is the backbone
of America, they manage trillions of dollars far more than than the banks do. And this is where the
federal government actually goes for help when they get into trouble. Did you know that? Okay?
One insurance company where I put some of my money manages about 3 and a half trillion bucks. That's
as much money as the IRS collects in income taxes in an entire year. And so, when you look at the
safety of the institution, that's one factor. The other factor is safety of the principal.
That is something that a lot of people don't think about. I want to put my money into an institution
and be assured guaranteed that I will not lose that principal. Because some CDs... meaning,
if you liquidate the certificate of deposit early, you may get back less than what you even
deposited. I don't want to ever lose money that I deposited in there and any year that I make money,
I want that to become newly protected principal. I don't want to ever lose in future years what
I made in previous years. Have you ever heard of this before? Let me explain this.
Now, the reason why I put my serious cash, money that is earmarked for financial goals
like retirement, maybe college funding for your children or grandchildren, emergency funds and so
forth; I don't put it in the bank. I might have a little bit in the bank. But I have my money
in these insurance companies in max-funded life insurance. My preference is indexed universal life
where I have averaged between 6 to 10 percent tax-free rates of return net cash on cash
for over 40 years. This is the most incredible instrument. And frankly, it's where banks
will take 30 to 40 percent of their tier-one assets and put into BOLI,
bank on life insurance. They borrow our money at one and they turn around and make 5%. How much
more is 5 than 1? Not 4, it's 5 times. They make 50,000 on every million. And they only have to
pay us 10,000 of interest. My heavens, what a deal is that for the bank? But see, when we talk about
the safety of these institutions, let's just look at the worst-case scenario.
If there was a total financial collapse which almost happened in 2008, what happened? 400 banks
went under, 900 more on the brink. The banks are the first ones to start falling, okay? Real estate
sometimes drops. You'll see real estate plummet and that's what happened in the great depression.
Some real estate dropped as much as 80%. Guess who came through the great depression with flying
colors? Life insurance companies. Legal reserve insurance companies came through paying 2, 2.5,
3.5 percent. Same thing in 2008. There's not one single legal reserve insurance company
in the great depression that went under. In 2008, guess how many legal reserve insurance
companies went under? Zero. They cross insure each other. They're not backed by
the government collecting premiums. If I have an insurance policy with a million bucks in it
and that insurance company for some reason gets temporarily insolvent, okay? They don't
go bankrupt. They don't go belly up. American general in 2008, they had a ton of mortgages
out there and they can't just call all their mortgages due and so they lack some liquidity
when there was a run on that insurance company. So, they were temporarily insolvent. So, that's
why they took some stimulus money and they only needed it for a few months until the cash came in
to be able to pay those people. But they had the money. They just couldn't call all those loans due
like that. And so, when an insurance company becomes insolvent. And there's only a handful that
do it. It doesn't mean they're broke. It means they don't have liquid cash enough to meet a huge
run on the money. And so, what happens? They are able to have other insurance companies come in and
they cross insure each other. I had a client who died right in the middle of that American General
liquidity crisis. And he had 2 million dollars of life insurance that he'd just taken out
the year before. And he died. They paid that 2 million dollars like clockwork in 3 weeks. How?
Because the insurance industry cross-insures each other every year. Every insurance company
in every state has to file a report. And so, if I have a policy and that company is in a insolvent
state which happens very rarely, all the other insurance companies in that state have to ante up
their proportionate share of your death benefit to maintain the integrity of the insurance industry.
They cross insure each other which is far more predictable and safe than having the government
collect a premium that sometimes has not been sufficient in order to cover that. But again,
the government can print money and taxes to bail out the banks. I would rather have my
money in the last domino that would fall. That if things got really bad, I would have a lot of for
warning. The banks would be going under. We would see real estate plummet. We'd see a lot of
turmoil. And I would have plenty of time to get my money out of my insurance policy. But what would I
do with that money? Where would I put it? See, if it's really that bad, the American dollar would be
worthless. Gold, silver, you can't eat that. You better be able to grow carrots in your backyard.
So, I don't worry about things that don't matter at the end of the day. But I put my serious cash
and the last domino that would fall so that I'm assured. This is where the banks put your
money. And if the insurance industry goes under, the American dollar would be worthless if you
understand what I'm talking about. So, what should you be doing? I would recommend that you closely
consider putting your serious cash. Money that you want on hand liquid and safe. Not in a bank. You
only need a few thousand bucks in a bank in case of an emergency. Do you know where my emergency
fund is? It's what I call the Laser Fund. Now, if you'll stay with me to the end of this episode,
I'm going to show you how you can learn about how to become your own banker. How to have a
laser bank. Laser is an acronym that stands for liquid assets safely earning returns.
And at the end of this episode, I'm going to help you claim your free copy of my most recent
best-selling 300 page book called The Laser Fund, okay? Now, here is what I do with my serious cash?
Whatever it's earmarked for. I have money that I'm shocking away from my future, for my retirement.
I do not put it in traditional IRAs and 401(k)s because those are taxable at the end of the day.
the Laser Fund is tax-free. It's been that way for over 107 years protected in the internal revenue
code. So, I want to have tax-free rates of return. What has my actual historical rate of return
been in max-funded indexed universal life which is my favorite vehicle which I call the laser fund?
I have averaged 8.2% rate of return since 1980 when EF Hutton first came out with this idea.
I have tweaked that rate of return many times in 10-20 year periods up to over 10% by rebalancing.
This is all explained in our most recent book. It's called the Laser Fund book number 11. And
I've been so blessed in my career to have written several books. One in 2007, became a New York
Times and Wall Street Journal number 1 bestseller the second week it was released. I am passionate
about empowering you. So, when you learn about how you can increase the liquidity, the safety
by 6 notches higher than money in a bank and earn better rates of return 4, 5, 6 times better than
what banks are paying at the recording of this episode and have it be tax-free, you will not
only have cash that will be available for you for a better retirement so you do not live your money.
But also, for money earmarked for maybe college funding. This knocks the socks off of a 529 plan
or emergency funds. Where do I have my emergency funds? In my Laser Fund. Because I can access my
money with an electronic funds transfer phone call. A bank could stall you up to six months
if things got really bad. They would say, "Sorry, you cannot get your money out of the bank for 6
months." They have the legal right to do that. Did you know? If I have a money that I'm using
as working capital for my business, I don't keep it in the bank. No. I keep it in my laser bank.
So, stay with me here. I'm going to share with you the dynamics of this dream solution this swiss
army knife and how you can get a free copy of my most recent best-selling book that will explain
how you can do this. So, when you read and study this book, you're going to understand that the
legal reserve insurance industry is not only the backbone of America, the backbone of the world.
It would be the last domino to fall if things got really bad. That's where I have my serious cash.
This is actually 2 books in one. And I'm going to show you how you can claim your free copy.
This side is 200 pages comprised of 14 chapters with all the charts and graphs and
explanations. If you learn more by stories, you're more right brain in your thinking,
you flip it over and you read this side. This is about 100 pages, 12 chapters, with 62 actual
client stories examples of how the laser fund is the dream solution. Like the swiss army knife for
your money for goals such as retirement, college funding, your working capital for your business,
emergency funds, real estate management, lump sums, all kinds of financial goals. This is where
I put my money to increase the liquidity, safety, rate of return. And I convert to totally tax-free.
Because money in a bank, you have to pay taxes on every single year on taxed as earned investments
unless it's an IRA or 401k, and then you're going to have to pay tax at the end of the day. The
government's going to come and take their share. This is a sacred cow. It's totally tax free.