- Pursue more by not following
traditional financial planning advice.
In this episode, I'm going to address
how creative destruction
is transforming the financial services industry.
Get ready. This is going to surprise you.
(upbeat music)
So I'm Doug Andrew,
and I've been a financial strategist
and retirement planning specialist now
for north of 48 years.
And I have been called an industry transformer
by many coaches.
One of my favorite coaches is Dan Sullivan.
He has coached over 6,000 of the world's top entrepreneurs.
And he interviewed me as one of 12 segments
on creative destruction.
So I'm gonna talk about what that is
but before I do that, if this intrigues you
or you wanna share this with somebody,
be sure and click like or share, post a comment,
and subscribe to this channel if you haven't yet
because it's free, and I post an in-depth episode almost
on a daily basis.
I've been a financial strategist, as I said, for 48 years,
and a lot of times, people will say,
"Doug, you're sort of an outlier.
You do not follow the herd."
Yes, I have learned that it's best not to follow the herd
or listen to the mainstream media
because, frankly, they're part of the herd.
And so when it comes to money and financial strategies,
a lot of people are saving for long-term goals,
such as retirement or college funding
for their kids and grandkids
or working capital for their business
or real estate management, emergency funds, what have you,
any long term goal.
And oft-times, we sort of just get caught up
in following the herd where we work.
We just put money in the company's 401k,
or we put money in tax-deferred IRAs.
And about 91% of Americans follow the herd,
putting money in tax-deferred accounts,
being told that they're likely gonna be
in a lower tax bracket when they retire.
And what I found is that has not been true
or axiomatic now for more than 25 years.
But it took the financial services industry
until about 15, 20 years ago to finally admit
that was not really the truth for many Americans.
Those who save money did not usually find themselves
in a lower tax bracket.
But they continue to say,
"Oh, just defer, and we'll worry about taxes down the road."
You know, a better step, in my opinion, is a Roth approach.
And I'll explain why in other episodes.
And we'll get to that,
but I've never been really a conformist.
But it's so hard to change people's thinking
once they get caught in this mentality
of just doing what everybody else is doing.
And so I've learned in life that I've never really grown
until I got out of my comfort zone.
If you just stay there in the comfort zone
and you go into the financial services industry
as a financial planner,
oft-times, you don't wanna go against the flow,
and so you buy into this concept of,
"Oh, just tell people to defer tax,
procrastinate it to some future perceived unknown advantage,
and put money in the company's 401k,
'cause everybody's doing it.
And you'll be safe if you just conform."
Well, you know, it's interesting
because a fiduciary is supposed to look out
for somebody's best interest,
and if you can see that somebody's a saver,
and they're really not going to be
in a lower tax bracket when they retire
because they are saving a lot of money,
you're not really looking out for their best interest
if you continue to let them put money
in a tax-deferred IRA, 401k, 457, 403b pension,
profit-sharing plan or whatever,
it would be far better to fund a retirement account
with after-tax dollars, sort of like a Roth approach.
Now, if you watch any of my episodes,
you will learn that I've never owned an IRA or 401k,
and I never will,
but I've never owned a Roth IRA or 401k
and never will because of what I teach.
And so I've written 12 books in my life,
and my 11th book is called "The Laser Fund."
And I'm going to share with you what I actually explain
or outline in the very first chapter,
which talks about creative destruction
and how to pursue more.
So what is creative destruction?
As mentioned, a very good friend of mine,
strategic coach, Dan Sullivan-
and I was part of his mastermind group for 20 years-
he introduced me to this concept,
which was sort of the brainchild of Joseph Schumpeter.
And Mr. Schumpeter talked about this concept
that in different industries-
and we're gonna talk about the financial services industry
in particular in this episode-
oft-times as the public is employing strategies,
and the financial advisors, in this case,
are beginning to employ different strategies
for their clients,
many times there are different regulators
that come in- and regulations are good-
but sometimes we start to get over-regulated
and they start to dictate what you can,
what you can't say, and so forth.
So for example,
I'm gonna go back
when I first started nearly five decades ago,
one of my favorite vehicles,
which I now call the Laser Fund,
it is a max-funded tax-advantaged insurance contract,
and this allows you
to accumulate your money totally tax-free.
And then you can access that money tax-free
to generate tax-free income.
And when you ultimately die,
anything left in the account blossoms
and transfers tax-free.
But it must be structured correctly and funded properly,
so you have to know what you're doing.
Well, when I first started,
I was taught to call it a non-qualified private pension
because people could understand what a pension was.
That's a vehicle, financial vehicle,
where you accumulated money for usually retirement, right?
And so that was an appropriate term.
It was a non-qualified, meaning it's not in the IRS
where you deduct the amount of money you put in,
and it's not regulated by those guidelines
as you might have under ERISA or whatever.
And so it was a non-qualified private pension,
meaning you own this yourself.
It was not funded by some corporation or what have you.
So it was a really powerful term.
But then the regulators said,
"Well, golly, people are getting confused,
and so we're gonna ban that.
You can't use that term anymore."
And so then we started using different variations
that got approved by legal counsel
and all the compliance officers.
And we went through this evolution over several years
from non-qualified private retirement plan
and then retirement planning alternative
and then retirement planning alternative to IRAs.
And then we had to add 401ks.
And pretty soon, we were saying sentences this long,
and you've probably seen this,
you have to say all these disclaimers.
And generally what happens
is you're trying to help a few people who were confused,
and then you're making the other 99% really confused
because you're having to say things a certain way
or you cannot explain it in the common language
that most people understand.
And so who actually suffers at the end of the day?
It's the general public.
And so this is what Joseph Schumpeter
would call creative destruction.
We get creative and the regulators
and all of them put all these restrictions
and all these parameters and regulations in place.
And then pretty soon the public is just going,
"Oh, come on."
And so there are industry transformers that then bypass,
they bypass the industry,
and they begin to explain it in layman's terms.
And many times they have
to give up their professional licenses,
like I did in 2005, to become a consumer advocate
and to get on the radio
and to get a YouTube channel like this one
or TV and write books.
Because as an author, I'm an authority-
that's where the word author comes from-
I'm an authority on these subjects.
But in order to explain it in a way
that the public would understand,
I do it compliant,
but I can't call something an investment because-
you won't believe this-
the financial services industry
will not let you call your house an investment.
And yet most Americans, if you said,
"So are you investing in home ownership?"
They would say yes.
"Or do you consider your house an investment?" Yes.
In the financial services industry,
you cannot call a house an investment.
Did you know that?
One of my favorite vehicles
that allowed you to accumulate your money tax-free,
be able to access the money tax-free,
and when you die, it blossoms and transfers tax-free.
But I've earned average returns of 9.62% for over 40 years.
And at the end of the day, when I die,
every million I leave behind blossoms to 2 million tax-free.
But every million I accumulate while I'm alive,
I can generate 80 to a 100,000 a year
of tax-free income based upon actual history
and some of the worst periods since the Great Depression
and without running out of money.
And so I ask people,
what would you call something that does that?
And they say, "Well, a miracle, a godsend
in this topsy-turvy world."
But you cannot call my favorite vehicle an investment.
Isn't that strange?
And so I'm fine with that
because investments now have been defined pretty much
by the financial services industry
as something that is volatile.
You can make money, you can lose money,
including your principal,
and investments are typically taxed sooner or later.
And so that's what we mean by creative destruction.
And this is why many times my coaches have said,
"Doug, you know, you think out of the box."
If you get out of your comfort zone,
that's the only time I've ever grown.
And so people call me, sometimes, a contrarian,
that I go against the traditional advice, which I do.
The traditional advice is,
"Oh, defer into traditional IRAs or 401ks,
and you'll likely be in a lower bracket when you retire."
I'm talking about a tax bracket.
Well, that has not been true or axiomatic now
for more than 25 years.
But it took the financial services industry
until about, you know, 10 years ago
to finally admit that was not the best advice.
Hello?
If you're a fiduciary, you're supposed to be looking
out for somebody's best interest.
And if you can tell that they're not gonna be
in a lower tax bracket when they retire
'cause they're a saver,
why are you postponing tax
to some future perceived unknown advantage
when they're gonna be in a higher bracket?
You should maybe switch and go to a Roth approach
and pay taxes in today's lower brackets
and enjoy the money down the road tax-free.
But 91% of Americans are duped following the herd
because of this industry standard,
put money into tax deferred IRAs or 401ks,
and you'll be safe.
You won't be sued if you just follow the herd.
Well, because I don't follow the herd,
I've never owned an IRA or 401k. Never will.
I've never owned a Roth IRA or 401k.
Never will because my favorite vehicle,
which I call the Laser Fund,
has the two benefits of a Roth
and four additional benefits Roths will never have.
But I had to sort of let all of my licenses go,
which I gladly did the last business day of 2005,
to become a consumer advocate,
to write books, get on the radio, TV,
now this YouTube channel,
and explain things in language that you can understand.
And so what happens is it hurts the consumer
when we have so much regulations you can't even tell people
in the language that they need to understand
because it's not compliant.
You can't call it that.
And so that's really sad.
So the purpose of the book,
all of the books that I've written,
especially the book I'm referring to right now
is book number 11, it's called "The Laser Fund,"
is to help you break away and see some opportunities
that maybe you didn't know existed before.
And the biggest question I get asked is,
"Well, how come I haven't heard of this before?"
Well, you've been listening
to traditional financial planning advice,
following the herd.
And then when people finally learn of something better,
they go, "Oh, okay. Yeah, this is different."
And so my invitation
to you is you need to pursue more
by not necessarily following
traditional financial planning advice, following the herd.
And pay attention
to some of the financial services industry transformers.
And I was featured in one of 10 episodes
that Dan Sullivan did based upon creative destruction
and how the financial services industry is imploding.
And I've basically escaped
and helped many, many people choose something
that not is just good but is better or absolutely best.
So I always have a ditty that goes,
"Good, better, best. Never let it rest.
Never let it rest 'til good gets better
and better gets best."
So this is why I wrote "The Laser Fund" book.
And the very first chapter
in this book talks about this very concept.
So the purpose here is for you to be able
to see some opportunities
that maybe you didn't know existed before.
It's not the same old, same old traditional advice.
And it's not for everybody,
if you like to follow the herd, so to speak.
But you will do far better,
but you must understand it correctly.
And so I am going to invite you to claim a free copy
of this 300-page book.
You don't have to pay $20. That's retail on Amazon.
I will gift you a copy of this 300-page book.
And it's actually two books in one.
This side is about 200 pages, 14 chapters
with all the charts and graphs and explanations
of how to diversify and create the foundation
for a tax-free retirement, not just tax-deferred, okay?
If you learn more by stories and examples,
you flip over to this book.
This is about a hundred pages, 12 chapters
with 62 actual client stories.
A right brain, left brain.
If you wanna use your whole brain, you can read both books.
But you go to laserfund, L-A-S-E-R fund dot com,
you click on the link below,
you contribute a nominal amount
towards the shipping and handling.
I cover the rest of that cost. I will pay for the book.
I'll fire out a hard copy to you.
There's also options there to listen and learn
or watch and learn.
And check out some of the online education
that we provide and webinars
and even live events maybe in your area.
You can even pick the brain
of some of the top financial strategists
and schedule a time to be able to ask them how any
of these concepts may apply
to your particular set of circumstances.
But this is about you and your brighter future.
(upbeat music)