- A 1 million nest egg can generate 80,000
to a $100,000 a year of tax free income.
In this episode,
I'm going to give you some stories of IUL owners
that get eight to 10% annual tax free payouts
for retirement income on a million dollar nest egg,
2 million, even $8 million nest eggs
that we help them accumulate
at average returns of eight to 10% totally tax free.
(upbeat ambient music)
So my name's Doug Andrew,
I've been a retirement planning specialist now
for north of 48 years.
During that time period, I've helped 1000s of clients
optimize their assets, minimize taxes
and empower their authentic wealth.
And a lot of times they come to me
'cause they want to save
for long term goals like retirement,
maybe college savings accounts for their kids and grandkids,
maybe working capital for business
or real estate management or emergency funds,
but they want a safe place
to earn predictable rates of return that are tax advantaged,
and that will keep up with inflation.
And I say, is that all you want?
I can do better than that.
And they go, I'm all ears. (chuckles)
Okay.
Now, if you've watched any of these educational videos
on this channel, you will quickly learn
that one of my favorite financial vehicles or instruments
that allows people to accumulate their money
totally tax free, not just tax deferred,
totally tax free is a max-funded
indexed universal life insurance contract,
but it has to be structured correctly and funded properly.
Unfortunately over 99% of those out there in America
do not accomplish what I'm about to explain to you.
And that's why I have a group called IUL Insiders
where I teach financial advisors and professionals
how to do it correctly.
Then it qualifies to be a Laser Fund.
And at the end of this episode, I want to gift you a copy
of my most recent 300 page bestselling book,
called the "Laser Fund" that teaches you how to diversify
and create the foundation for a tax free retirement.
When you read and study this book,
you'll know more than 99% of advisors do,
and I'll be able to point you
to the ones who actually have taken the time to learn this.
Now I wanna just cut to the chase
because you can accumulate your money
at rates of return averaging eight to 10%.
Now there are some periods of time,
some years where indexed universal life has credited me
and my clients, IUL owners with 16%, 25%.
Yeah, 2017,
many of our clients locked in gains of 25% tax free.
They started the year 2017 with a million dollars,
and 12 months later, it was worth 1,250,000.
They made 25%.
That also happened in the year 2021.
But 2021 was the COVID pandemic,
and they have the opportunity to use a strategy,
an opportunity that only comes by
maybe once every decade or so.
And in March of 2020,
the market dropped 30% in one month because of COVID-19.
And our savvy IUL specialist told their clients
link to a one year point to point with no cap.
Now, generally we don't give that advice
because in a normal economy,
you want to have a one year point to point strategy
where if the S&P goes up 12, you get credited with 12.
There might be a cap, they won't pay you any more than 12
if it goes up more than that, but if you're pretty convinced
that the market's gonna go up higher,
you can choose this strategy.
So we figured
that the market would likely come back after COVID-19,
and it did.
And one year later in March of 2021,
the market was up 66.33% from the bottom of March of 2020.
And so with that strategy,
the insurance company deducts 5% or a spread.
So the market went up 66.33 minus 5%, they netted 61.33.
Yeah, people got credited 61%.
We had a client with 830,000
in March of 2020 without adding a dime.
He ended up with million 380 some odd 1000 one year later.
He made over a half a million tax free
in one single year on his IUL.
So when critics out there naysayers say,
oh, I've never seen an insurance policy do that.
Well, hello, I could show you 100s of policies
that have been earning these rates of return,
but let's just bring it down
to a nice little average of seven to 10%.
I have averaged 9.62% since 1980.
This was before index universal life,
this was just universal life.
I've actually averaged more like 11 netting 10.
Only 1%, that was the cost of the insurance
that the IRS had had to be there
in order for it to be tax free.
Okay.
But I can earn 11 in net 10, I can earn nine in net eight,
I can earn 25 in net 24, I can earn 61 in net 60
by structuring it correctly.
And so I'm gonna gift you a copy of my best selling book
at the end of this episode, so stay with me here,
but be sure and subscribe to this channel.
It's free and be sure include that little bell
so you'll be notified
every time I post a new educational video,
which I do almost on a daily basis.
So let's go back to how people are able to generate
eight to 10% payouts tax free.
Many times when I teach a live event,
I will start a six hour retire by design event
by telling the audience, "in this six hours,
you will learn how an insurance company
earning 4% on their general account portfolio,
that's how much they're earning
on the billions they're managing,
they're earning 4%, how they can afford to pay you 8%
even though they're only earning four."
And they go, really?
I go, yeah.
And also you will learn how that insurance company
can give you a 10% payout.
In other words, that you can accumulate a million bucks
and they'll send you a 100 grand a year.
That's a 10% payout.
10% of a million is a 100 grand,
even though they're only credited INU eight
without depleting your million dollar principle.
And they go, no way, and I say yes, way.
In fact, you wouldn't believe how many financial advisors
do not understand how to do what I just said.
So you can watch episodes on this channel,
but I'll give it to you in a nutshell.
Now, if you're accumulating money in an IUL policy,
you can stock away 500 bucks a month,
and based upon these average rates of return, 9.6%,
500 bucks a month in 30 years will grow to a million bucks.
You can start out with a lump sum of three,
let's say 250,000.
And then add 2000 a month,
and in 10 years you'll have a million bucks.
It's just math compound interest.
You can put in 500,000 into the policy.
And in seven and a half years, it'll double to a million.
Okay.
I'm just using simple math
based upon the average rates of return.
But let's just take the snapshot in time
when you're gonna start turning on the income.
It doesn't have to be after age 59 and a half,
it's anytime you wanna start creating income
and it's totally tax free under sections of the code,
it's mainly 7702.
Now I talk about that in other episodes.
So let's just use a million dollar example
and you can extrapolate from that
if you have less money than that,
if you have only a 100,000, it's one 10th, my example,
if you have 10 million, which some of our clients do,
it's 10 times this amount.
So for every million you have, if you wanna turn on income
and if you wanna take out
the most income without depleting principle,
you basically pull out the equivalent of your interest.
And in various episodes, I talk about,
there's the dumb way and there's the smart way.
Now, there is also the sad way, that's by dying.
That's one heck of a return,
but I don't recommend it because you have to die.
But you have a million in there, you die,
you'll leave behind two and a half million.
That's that's one heck of a return,
but you're not around to benefit from it,
but your spouse is, your kids or grandkids,
your beneficiaries.
But if you live, your million,
you can withdraw the equivalent of your interest,
and you can do that clear up to your basis,
the amount you put in and it's tax free.
But if you withdraw and you have recovered your basis,
you now have to pay tax on anything thereafter
'cause now you're into your game.
So I tell people how savvy investors do this.
They borrow the equivalent of their interest.
Why would you do that?
Because there's two ways to borrow.
When you borrow money that's tax free,
you don't have to pay tax on any money you borrow.
The IRS says, borrow the equivalent of your interest.
So just reason with me, you've got a million bucks in there.
If you had a million bucks in the bank,
you could go borrow money from the bank,
but what would the bank do?
They would probably charge you 5% and only credit you 1%.
The insurance company does sort of the opposite.
If you borrow,
let's say you got a million dollars earning 10%,
you borrow a 100,000,
which is the equivalent of your interest,
but now your million is still there earning 10%.
So at the end of the year, your million
is now worth 1,100,000 minus the $100,000 loan
equals the same million
that you would've pulled out and maybe triggered tax,
but loan procedure, tax free.
So far so good?
Now that $100,000 loan is just a Phantom loan,
meaning it's not doing payable during your lifetime,
it's washed away when you ultimately die.
But if you do that every year,
it's gonna grow a 100, 200, 300, 400,000
but this is gonna grow a 100, 200, 300, 400.
This minus this equals the same million
had you pulled out the money the dumb way and paid tax.
And so at the end of the day,
you could go 20 years and have a 2 million loan balance,
and this is now worth 3 million, 3 million minus 2 million
equals the same million that you would've had,
had you pulled it out the dumb way
and paid tax all those years,
but instead you had tax free income.
Now there is one little catch,
in order for it to be construed a true loan,
the IRS says,
the insurance company has to charge you a nominal,
a statutory minimum interest rate.
That's usually around like 2%.
So they charge you 2% on the loans,
but they credit you the same rate, 2%
on the money that is collateralizing that loan.
And on the original million,
you're still earning you know, eight to 10%.
If you're going, what?
In other words, it's zero cost,
it doesn't cost you anything to call it a loan.
So far so good?
Let me go one step further.
You know what smart people do?
They use the index loan.
You tell the insurance company, you can charge me 4%.
Why?
Because if they charge you 4%,
it's not doing payable during your lifetime.
They will credit you on all the money as it grows,
not just the original million.
They'll credit you the index rate of 8, 10, 25%.
Hello.
(soft ding) I had a client in 2017
that borrowed a million out of his IUL policy.
He borrowed it 5% on a million bucks, that's 50 grand.
He didn't have to write out a check for that interest.
They deducted it from the 25%.
He earned on his policy.
He earned 25 or 250 grand minus 50,
he netted 20% or 200,000 tax free on his million,
while he was using that million in his business,
and he actually made an extra 3 million in his business.
If this is blowing you away.
Good, you need to learn this, 'cause you're missing out.
This is how money works.
So when you do this, let me come back full circle,
if the insurance company
is earning 4% on their general account portfolio
and you tell them link to an index,
they're taking the 4% interest on your million,
that's 40,000 and they're buying upside options
so that the market goes up, they pay you eight,
they pay you 12.
But if the market crashes, you don't lose your million.
Okay, they just, the options expire worthless.
But if the market goes up, the insurance company
has the wherewithal to pay you eight or 12%,
even though they're only earning four
because they bought upside options.
And if the market goes down, they expire,
but that's what you're willing to do.
This is how an insurance company
can afford to pay you eight,
even though they're only earning four
'cause you're telling them, you can take the 4% interest,
the money and by upside options,
and they'll have the money to pay you a higher rate
if the market goes up,
but if the market goes down, you gave up the 4%.
So far so good?
And then I told you that the insurance company,
when you take out money, if you borrow at four
and they keep crediting you eight,
how much more is eight than four?
Don't say four.
That's double.
That's a 100% more.
If you borrowed at four and you only earned six,
that's two extra percentage points
you're earning over and above what you're paying.
That allows people to be able to pull out 10%
out of a million dollar (indistinct),
a 100,000 without depleting principle.
Now, if I went a little bit fast, review this, rewind it,
because I basically told you how an insurance company
earning four can afford to pay you eight,
they can also afford to give you 10% payouts
without depleting principle
if you pull out your money the smart way
and you let them charge you four
and let them keep credit in you just 6% or higher.
These are illustrated in my book.
So this is what I want you to do,
if you don't learn this, you're gonna kick yourself.
Go to laserfund.com, l-a-s-e-rfund.com,
or click on the link below.
And you contribute a nominal amount
towards the shipping and handling,
you have to have some skin in the game.
I'm not trying to sell you a book.
I will pay for the book.
I'll fire out a free copy to you.
And there's also options there to listen and learn
or watch and learn if you want
or there's even an 18 hour masterclass.
But check out some of the online webinars
that we teach on a regular basis.
And if you wanna talk to a specialist,
an advisor who understands how to implement this correctly,
be sure and do that when you're in there
claiming your free copy, okay.
Now this is actually two books in one,
this side is for the left brain thinker.
This has all the charts and graphs and explanations.
If you learn more by stories, you can flip it over
and read this one, a 100 pages, 12 chapters
with 62 actual client stories for the right brain learner.
If you want to learn with your right brain
and your left brain, read the whole book, okay.
But claim your free copy, then be sure and connect with us,
and we can point you to an advisor
that will help you implement a Laser Fund correctly
and diversify
if your advisor doesn't understand how to do this.
If you think your advisor does, you will read on page 195,
14 questions to ask your advisor.
And if they cannot answer those 14 questions off the cuff,
if they go, oh, I don't know, I'll have to check that out.
Or if you can tell they're faking an answer,
that's a red flag.
They either need to join our group IUL Insiders to learn
or if they refuse, if they think they know it all,
I would change advisors, and I can point you to the ones
who know how to implement this correctly.
This is about you and your brighter future.
I do not want you
to outlive your money. (upbeat ambient music)
So seize the opportunity.