- Compare different financial vehicles.
In this episode, I'm going to address
how a properly structured max-funded IUL
beats other financial alternatives.
Get ready, I've been doing these illustrations for years
and you will see why my favorite financial instrument
bar none is a max-funded indexed
universal life insurance policy structured correctly
and funded properly.
Then it is deemed a LASER fund.
(upbeat music)
So my name's Doug Andrew.
I've been a financial strategist
and a retirement planning specialist now
for north of 48 years,
helping people optimize their assets,
minimize taxes, and empower their authentic wealth
primarily for long-term goals like retirement
or maybe college funding for their kids and grandkids
or working capital for business
or real estate management or emergency funds,
estate planning, on and on and on,
primarily to help people with their serious cash
not outlive their money when they go to access the money.
And so I show them ways
to accumulate their money tax-free safely
at rates of return that historically have beaten inflation.
I want to outpace inflation.
I want them to be able to access money to income tax-free
and not have to wait until you're 59 and a half to do that,
'cause this is not a qualified plan like an IRA 401k,
even though you can use it for retirement.
And in my opinion, it knocks the socks off of IRAs and 401ks
'cause it's way more flexible
and earns better rates of return.
And then at the end of the day when you finally pass away,
anything you leave behind blossoms,
increases in value and transfers income tax-free.
Nothing else does that in the Internal Revenue Code,
and I teach that in my various books
and educational videos
on this channel, (bell chimes)
and this is provided under three sections
of the Internal Revenue Code, section 72E,
7702, and 101A.
So I talk about that.
I teach advanced continuing education to CPAs
and tax attorneys about these three sections of the code.
They sit there with their mouths open
'cause they've maybe heard about 'em,
but they didn't have to learn them in depth
to get their LLM degree.
That's a master's in taxation.
So they come through and they go, oh my heavens,
I didn't know what I didn't know.
Yeah, you can't be aware of something you're not aware of.
So then I show them why this knocks the socks
off of other traditional places
where people put their money, like IRAs, 401ks,
annuities, mutual fund portfolios, maybe municipal bonds.
Sometimes people just hunker down and put their money
in a bank or credit union 'cause they're scared to death
of putting their money at risk in the market
and they're rowing upstream at the rate of one mile an hour,
one percent interest in a bank.
And of course the current of inflation's coming down
at three, four, five, six, seven,
10, even 15 miles an hour and they're going backwards.
And so they would come to our educational events,
especially at retirement,
'cause at retirement planning is something totally different
than maybe what you did for retirement.
And people begin to realize,
I'm gonna outlive my money
because of three big dangers
that cause most people to outlive their money,
taxes, inflation, and market volatility.
So I love to help people eliminate those dangers,
make them immune from them,
and that my favorite instrument to do that
is a max-funded indexed universal life insurance policy
structured correctly and funded properly.
Then it is deemed a LASER fund.
LASER's an acronym
that stands for liquid assets safely earning returns.
So then people wanna say,
golly, this sounds too good to be true.
How does it really compare to other financial alternatives?
So for decades I would love to show people, okay,
I wanna show you an illustration first of all
without increasing your outlay one dime, okay?
We're just going to take what you're already setting aside,
what you've already accumulated
and what you're setting aside on an annual basis
without increasing your outlay one dime.
I want to help you optimize your assets
by increasing the liquidity, safety,
and rate of return and the tax benefits.
So we're just gonna reposition these assets,
move 'em around and reallocate
and I'm gonna show you at the end of the day,
let's say they were gonna retire at age 65, okay?
How much better off you'll be at age 65,
but that's just the beginning of the story.
I'm gonna show you starting to take out income,
because you don't choose investments
based upon which ones grow to the most.
You may think, well look, my IRAs and 401ks,
if I get this rate of return, they're gonna grow
to as much as your LASER fund
or your portfolio of LASER funds does.
I'm going, whoa, whoa, whoa, no.
We're gonna look at the back nine
of this 18 whole golf game of life.
Let's look at you taking income out
and you're gonna see how fast money in those IRAs and 401ks
and annuities and so forth will crash and burn
and you'll run out of money before you run out, okay?
You will outlive your money.
So I would show them illustrations
not only during the accumulation phase,
but during the distribution phase
and it would shock them when they would see
where they had their money,
it would run out at age 72, 76, 78
and the LASER fund would keep crediting income
until they were 120 and it wouldn't deplete.
It would actually grow
and all the others were were depleted.
And the software I used would show
how much they would be in the hole,
and they saw that some of these accounts,
like IRAs of 401ks invested in mutual funds
were in the hole two or three million
when the LASER fund still was going
and still had the amount of money in it.
And I'm going, hello?
It's because if you need to net 100,000 a year,
you only need to pull out 100,000
out of a LASER fund 'cause it's tax-free.
To net 100,000 out of a tax deferred IRA or 401k,
you have to pull out $150,000 in a 33% bracket,
pay tax of 33% to net 100.
A million dollar nest egg will be drained dry,
totally gone in 11 years.
The LASER fund can go on another 20 years
without depleting that million.
Another 20 years of 100 grand is two million extra dollars,
and you still have your million.
That's a three million better retirement nest egg.
Would you like a three million better retirement strategy
than your IRA or 401k with the same amount of money in it?
It was a no brainer.
But see, they never realized that impact
until they saw the illustration compared
on the back end when you started to take income
and you got clobbered with taxes
or it eroded away the purchasing power 'cause of inflation,
which is like a hidden tax, or even the market volatility,
so that's why we eliminate those dangers.
So a LASER fund can accomplish that,
and so this is why in a book
I wanna gift you at the end of this episode,
and by the way, if you're already intrigued,
be sure and click like, post a comment,
share this episode with somebody
who you think really ought to hear this or watch this,
but most importantly,
subscribe to this channel if you haven't.
It's free, and when you do,
(bell chimes) click that little bell,
'cause then you'll be notified
every time I post a new educational video,
which I do almost on a daily basis.
I don't want you to miss out.
But stay with me here to the end
because I want to gift you a copy
of this 300 page latest bestselling book
called "The LASER Fund".
This is flying off of our warehouse shelves.
I don't want you to miss out
and I'll gift you a copy for free.
Now, in this LASER fund book,
I have 14 chapters here in the left brain side.
This is all the charts and graphs and explanations,
and I'm talking about chapter 10 right now,
where we actually show scenarios
of where you could put money,
where a lot of Americans do,
in tax deferred IRAs and 401ks invested in the market,
or in maybe banks and credit unions,
perhaps in real estate,
maybe in municipal bonds, 'cause oh, they're tax-free,
annuities, a lot of people put money in annuities,
which are only tax deferred.
There's a lot of different alternatives
that people are shown.
And then we compare it to a LASER fund
during the accumulation phase and the withdrawal phase,
and when they see how these others crash and burn,
they're like, oh my heck.
It is really significant
to have it be tax-free on the back end.
During the harvest years instead of worry so much
about getting a tax break on the seed money,
it's more important to have the harvest be tax-free,
and that's a metaphor we use in the book.
But then if we cut to the chase and go to page 165,
which is in chapter 10, we're talking about comparison
to various financial vehicles.
And so on this figure 10.23,
it shows here these optimal features on page 165,
and we start out with the four
that are on the front of the book,
liquidity, safety, rate of return, and tax benefits.
Those are the four key elements of a prudent investment.
So those are the first four optimal features,
liquidity, safety, rate of return, and tax benefits.
But I've also added, okay,
we wanna have tax-free access and it's tax deferred.
Do you get to deduct what you put into it?
You know, IRAs and 401ks allow that.
The LASER fund doesn't.
But that is the only one
that is colored no on the laser fund,
'cause it's like a Roth.
You put in after tax dollars.
But all the yeses far
outshine all of these others
with these various alternatives.
'Cause I add here, is it penalty-free?
Can you leverage with this?
Can you actually borrow against your LASER fund at a bank?
Yes.
Can you use it as collateral
and does it have a self-completing disability benefit
if you get disabled?
Yeah, you can do that.
So it goes through all of these various alternatives.
The main ones are IRAs and 401ks invested in the market.
Well, is it liquid?
Well, maybe if you close it out
and you go grab your money,
but you might have a 10% penalty.
You might trigger tax.
How about safety?
No, money in the market's not safe.
You can lose 30 or 40%.
How about predictable rates of return?
No, no predictability with money in the market.
Tax-free access to your money?
No, you're gonna have to pay tax when you access your money.
Is it tax deferred?
Yeah.
Can you put in tax deductible contributions?
Yeah, but you're gonna be clobbered on the back end.
How about, does it transfer tax-free?
No.
Is it penalty free?
No, you're gonna have a 10% penalty,
and if you don't start withdrawing money by the age of 72,
it's a 50% penalty.
Can you leverage with it, no.
Collateral, usually no.
Disability benefit, no.
So it doesn't look very good.
There's only two yeses.
You go over to mutual funds.
Mutual funds are generally liquid,
but safety, no,
predictable rates of return, no,
tax-free access, no,
tax deferred, no,
tax deductible payments, no,
tax-free wealth transfer, no,
penalty-free, maybe.
(bell chimes) It's possible.
Leverage, no,
collateral, yes, you can use it as collateral,
disability benefit, no.
So there there's only a couple of positive
optimal features with a mutual fund.
How about your house?
Well, liquidity, only if you can borrow or sell it.
Safety?
No, a house can go down in value.
Predictable rates of return, no.
Is it tax-free?
Well, the IRS gives you a break
if you sell your personal residence,
or you can defer with 1031 exchanges, but they're limited.
Tax deferred, possible.
Tax deductible payments,
well, the interest that you're paying on a mortgage.
There's IRS limitations
on what you can transfer when you die.
Is it penalty-free?
Usually.
Leverage, it's possible to leverage that.
Collateral, you can use it as collateral, your home.
So a home's okay, but it's not a place...
Houses were made to house families, not to store cash.
And if you read a lot of my books,
I'll talk about why I keep my serious cash
over in a LASER fund, even though I own real estate.
CDs and banks, you can figure out this.
Yeah, you can go to a drive-up window
if you think that's liquidity,
but the rate of return in a bank is pathetic.
You're rowing upstream at the rate of one mile an hour,
one percent interest, the current of inflation
coming down at three, five, 10, 15.
You're going backwards.
Rate of return's pathetic.
Annuities.
They're only tax deferred.
When you turn on income, they're now taxable.
Annuities are pretty good,
but they don't blossom when you die.
So you put in after tax dollars into an annuity,
and then when you start, the income is now taxable.
So I've never owned an annuity.
I doubt I ever will
because a properly structured max-funded IUL policy
will outperform an annuity any day,
and it blossoms when I die and transfers tax-free.
Real estate is similar to your home.
You can only access money out of there if you borrow on it,
and sometimes when you need the equity the worst,
it's the hardest to get unless you just sell it,
and then sometimes you have to sell it in a soft market.
But as far as safety, no,
real estate can drop in value 30 and 40%.
It has many times.
Predictable rates of return, no.
You get some possible tax benefits.
The LASER fund comes through with flying colors.
Liquid?
Yes.
I can access money with one sheet of paper
or an electronic funds transfer a phone call.
I can email it
and it's super liquid when I need the money.
How about safety?
Oh, safety of principal when I set aside the money,
and any year I make money,
it becomes newly protected principal.
I will not lose money due to market downturn.
So you have safety of institutions, safety of principal.
I'm able to earn predictable rates of return.
Now, if I link into an index,
there might be some years zero,
but some years I might be credited 25% or 61%.
But pretty predictably I've averaged 9.62%
in any 20-year period since it was introduced in 1980.
Pretty predictable rates of return there.
Tax-free access, yes.
Tax deferred, yes.
Can you deduct what you put into it?
No, it's sort of like a Roth in that fashion,
unless you use some other strategies
I teach in some of my books,
and you can get indirect deductions.
Tax-free transfer, yes.
Is it penalty-free?
Usually, unless you do something stupid.
Leverage, yes, you can leverage it.
Collateral, you can use it as collateral to borrow,
and you can have it self-completing in disability.
It has all of these benefits over here that knocks the socks
off of all other financial alternatives.
So that's why this chart on page 165 will begin
(bell chimes) to enlighten you
on why a properly structured max-funded IUL
beats other alternatives hands down.
To me, it's a no brainer.
Why would you mess with anything else?
But the four key elements are liquidity,
safety, rate of return, and tax benefits.
That's why I put them as the four pillars
on the front of the book.
So if you want to learn more,
claim your free copy of this 300 page book.
It's two books in one.
This side is about 200 pages,
14 chapters with all the charts and graphs
if you're a left brain learner.
If you're more of a right brain learner,
you learn by stories and examples,
you flip it over and read this one,
about 100 pages, 12 chapters with 62 actual client stories.
If you wanna use your whole brain, read both of these books.
But here's how you claim your free copy.
You 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.
Come on, you gotta put some skin in the game.
I'll cover the rest of that cost.
I will pay for the book.
I'll fire out a hard copy to you,
but watch,
you can listen and learn too.
You can watch and learn.
Check out some of the online learning
and the educational webinars that we conduct
and learn from those.
And if you want to see how these strategies may apply
in your particular set of circumstances,
you can actually schedule an appointment
with an IUL specialist
to see how these strategies apply to you.
They can create hypothetical scenarios
based upon your assets,
and they will not bill you for their time.
They will not invoice you.
Is that fair?
So engage now, claim your free copy,
and begin to take ownership of your brighter future
and you'll see why this is my favorite vehicle, bar none.
(uplifting music)