- Bypass the bank or credit union,
which is really just a middleman,
and keep your emergency funds where they do.
In this episode,
you will understand why a max-funded IUL
is the dream solution for an emergency fund.
Get ready.
(upbeat bright music)
So, I'm Doug Andrew.
I've been a financial strategist
and a retirement planning specialist now
for north of 48 years.
And I've helped many, many thousands of people
to be able to optimize their assets
and minimize taxes,
and empower what I call their authentic wealth.
And so many times
when I would meet with clients,
and they would come in to reposition
underperforming or non-performing assets,
many times, I found that people would have 50,000,
100,000 , three quarters of a million,
even in excess of $1 million
sitting in a bank or a credit union.
And it's been sitting there maybe for months or years.
And I would ask,
so what is this money in the bank earmarked for?
I remember one woman, she said,
"Well, I was thinking about taking a trip,"
and I went, "To the moon?"
Hello, well, sometimes people don't know
where to park money.
They're afraid of investing
in the volatile stock market or whatever,
and so they just put it in a bank or credit union.
The problem is,
the last couple of decades,
the rate of interest that is credited by banks
and credit unions has been pathetic.
I mean, back in 1980,
six years after I first started,
I started in 1974,
you know, CDs at banks were paying 10%.
Inflation was double-digit,
but now, many banks and credit unions
are crediting less than 1%,
which is ridiculous.
But it's like rowing up stream, so to speak,
at a rate of one mile an hour,
and the current of inflation's coming down
at three, four, five, six, seven, eight, nine,
and you're going backwards.
And so, sometimes people think,
"Well, I wanna keep my money in a bank or credit union
because it's safe,"
or "it's liquid.
I can go to the drive-up window
and I can access my money."
And so they think that means it's liquid.
Well, actually, it may not be as liquid as you think
just because it has a drive-up window.
In this day and age, you can access money
with an electronic funds transfer or a phone call.
And so money is actually very liquid,
even though it might be across the country
in a financial institution,
like a multi-billion or multi-trillion dollar
insurance company.
Now, here's something that shocks a lot of people.
I say, "Do you know where your banker credit union
takes your money?
Do do they put it in a vault?
And they're just being benevolent
and crediting you interest?"
"No," so what are they doing with your money?
And most people say,
"Well, they're loaning it back out again."
Yeah, well, then how do they have the liquidity
to be able to give you your money
if you walk in and ask for your money.
Now, if push came to shove,
and there was a panic, a run on banks,
they technically, legally,
have up to six months they could stall you
from withdrawing your money out of their institution.
Most people don't realize that.
People feel, you know,
"Okay, it's got FDIC insurance," what have you.
But there have been periods of time where FDIC
has been technically broke,
but we know the government has the ability to tax us
or print money,
and so we feel somewhat at ease
that we can access money in most emergencies
if it's parked in a bank or credit union, okay?
Now, the fact of the matter is,
in 2008, there were over 400 banks that went under.
There were 900 more that were on the watch list,
on the brink of going under.
And so a lot of Americans don't realize
how close we came in America to a total financial collapse.
And you would've had to have waited
at least six months to get your money out of a bank.
The federal government asked in 2008
the five major banks in America
to disclose where they have their tier one assets.
Those are assets that they must have on hand,
liquid and safe, they can access readily
in the event of a major run on their bank.
Guess where the five major banks
disclosed they had 30 to 40% of their tier one assets?
In insurance companies.
Ofttimes in what is called BOLI.
That's an acronym that stands for bank owned life insurance.
And people go, "What?
The bank owns life insurance on people, who?"
Well, it could be their board of directors,
it could be stockholders.
The point of the matter is why do they do that?
Because the owner of an insurance policy
gets all of the tax-free accumulation,
all the interest and everything.
The owner is usually the insured,
but it doesn't have to be.
In fact, COLI, C-O-L-I is corporate owned life insurance.
There's a lot of corporations that keep their assets
parked in insurance policies
in cash value,
but they have to have and ensured
that has the insurance on them,
even though they may own the insurance policy, okay?
And so what I've been telling people,
if this is where banks and credit unions
put 30 to 40% of their tier one assets for liquidity
in case they need to get money and safety.
Now, a lot of times, we think banks are safe
because of this FDIC insurance.
Well, the fact of the matter is,
there's a lot of rating agencies
will use S&P, Standard and Poor's.
Unfortunately, a lot of banks in America
are only rated maybe BBB by S&P.
You look at most of these insurance companies,
and they're rated AA or AAA.
What is the difference between AAA and BBB?
About six notches higher in safety.
So banks are taking your money
that you park in their institution,
and to increase the liquidity and the safety
by maybe five or six notches higher,
they're taking a portion of your money
and putting it into multi-trillion dollar
insurance companies,
because they're the backbone of America,
the backbone of the world.
They came through the great depression
with flying color
when banks closed and 40% never reopened again.
Not one single legal reserve insurance company
went under in the great depression.
Same thing happened in 2008.
Not one single legal reserve insurance company
went under in 2008.
So they're increasing the safety,
but also the rate of return.
Banks, let's give them the benefit right now,
as of the recording of this video,
they're accrediting less than 1%.
Let's say 1%.
So on every $1 million
that the general public loans the bank,
because there's only four things you can do with money,
you spend it, lend it, own with it, or give it away.
When your money's in a bank, or credit union,
or in an insurance company,
it's in a lended position, okay?
You're loaning them your money
and they're paying you interest.
So they are borrowing OPM, other people's money,
and they're paying you, let's say 1%.
On every 1 million, 1% would be $10,000 a year
they're paying in interest.
Now, in 2008, they were turning around
and putting 30 to 40% of their tier one assets
in insurance companies,
and their average earnings at that time
was about 5%.
How much more is 5% than 1%?
Don't say 4%.
It's five times.
It's 500% more.
Meaning, on a million,
they only have to pay 10,000 in interest to you,
the depositors, okay?
And they turn around and make 50,000.
Let me reframe this.
Would you hire an employee for 10,000
that made you an extra 50,000?
That's a 500% return unemployment cost.
Would you buy a widget machine for 10,000
that made you an extra 50,000?
That's a 500% return unemployment cost.
Business owners understand this.
So you can bypass the middleman,
you can put your emergency fund
directly into the places where banks put your money
when you put it in their institution,
and if you need to access money,
in this day and age,
you could access it in two or three days pretty easily.
Most emergencies don't require you need money
within, you know, 24 hours or less.
But if push comes to shove,
you can actually have money wired
out of the insurance company,
out of your index, universal life insurance policy,
which is where I put my serious cash as an emergency fund.
So that's why a max-funded IUL
is one of my favorite, you know, dream solutions
to have money on hand for liquidity,
safety, and earning a better rate of return
by five times what banks and credit unions do.
And it may not have a drive-up window,
but I can access money just as easily with technology
as if there was a drive-up window.
So this is why I really help people understand,
if you want to have an emergency fund
that is actually more liquid,
safe, and earning a much better rate of return
than a bank or credit union,
I would only keep maybe 10,000 or 20,000
or, you know, 60 days or 90 days worth of income
in a bank or credit union,
if that makes you feel better.
But where I put my serious cash as an emergency fund
is to bypass that middleman,
the bank or credit union,
and put it into an IUL policy
where I could access the money.
And in the meantime, I'm my own banker, so to speak.
So if this is intriguing you,
let me help you understand
how you can learn more about this.
I want to gift you a copy
of my most recent best-selling book called "The Laser Fund."
Now, this has been flying off of our warehouse shelves,
I don't want you to miss out.
This is actually two books in one.
This side, the white side is about 200 pages,
14 chapters, that has all the charts, and graphs,
and explanations of how you can diversify
and create the foundation for tax-free accumulation,
for long-term goals like retirement,
but even an emergency fund.
If you learn more by stories and examples,
you flip the book over to this side,
and this is about 100 pages, 12 chapters,
and they have 62 different stories
that we have in here,
of ways that the laser fund,
which is a max-funded IUL policy,
can be used as the dream solution for many goals
including an emergency fund.
Here's how you can claim your free copy.
Simply go to laserfund, L-A-S-E-R fund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling,
I cover the rest of that,
I'll pay for the book.
You don't have to pay $20 on Amazon or more.
They're even selling it on Amazon
for more than 100 bucks.
I will gift you a copy.
You contribute the nominal amount
towards shipping and handling,
but when you're in there,
there's gonna be options to listen and learn,
watch and learn.
You may even wanna check out
some of the educational webinars that we do online,
because this is about you and your brighter future.
(upbeat bright music)