Simply link your investment returns to the things that inflate. In this episode,
I'm going to address a question that I've been asked thousands of times, "Doug, what
do you do to combat inflation?", I'll share with you why I've always been able to earn a rate of return
greater than the inflation rate at any given time.
So, my name's Doug Andrew, I've been a financial strategist and a retirement
planning specialist now for more than 48 years and I've been helping many many thousands of
Americans prepare for long-term goals such as retirement to be able to not outlive their money
when they get to retirement. But there's a lot of other long-term goals maybe college funding
for your kids, your grandkids, or working capital for a business, or whatever, and people will ask me,
"Well, Doug, what's your favorite investment or financial vehicle to be able to set aside serious
cash and not jeopardize it, not lose it, when the economy is topsy-turvy and going through all
kinds of gyrations and how do you earn a rate of return that will be equal to or greater than the
inflation rate?", how do I combat inflation? So, get ready. In this episode, I'm going to share with you
it's really simple how to link your returns to the things that inflate. I don't like inflation
any more than you probably do but it doesn't hurt me it actually helps me. But it's amazing
how many financial advisors do not understand what I'm about to teach you? So, I mentioned I've
been doing this a long time. I started in 1974 and in the late 70s, you know President Carter,
Jimmy Carter, he took over and he's like sometimes politicians who have never run
a candy store before and he was printing money and what have you inflation got to double digits
and uh even as high as 14%. Because he was doing things quite similar to what President
Biden did even the first year of his office here and so I'm recording this episode at the end
of the first calendar year since he took office and we've seen inflation already I think a 30-year
high ever since the Carter years. Because he's been printing money like crazy thinking that's the
best way to pay for all of this spending that's been going on. Back during the Carter years when
inflation hit let's say 10%, I was earning 15 and a half percent on my money which was more
than five percent the cost of inflation. So, yeah, I don't like ten percent inflation but I was earning
five percent more than that. So, I've always been blessed to earn at least five and a half percent
rate of return greater than the inflation rate at the time to outpace inflation. Now, I may not be
able to handle runaway inflation but normal inflation even if it gets double digits which
it is right now as of the recording of this video and we're talking about the true rate of inflation
is more like 14 or 15 percent towards the end of 2021 and sure enough in 2021, I and many of my
students and clients of the advisors I point my students to have locked in gains of 25%, 32%
even 61.33% and a handful of them have locked in gains of 153 percent this year.
Because they understand what's going on and how to link their returns to the things that
inflate to be able to outpace inflation and yet I can't believe how many advisors go,
how do you do that? Okay, so let me explain what I mean by link your returns to the things that
inflate. So, if you subscribe to this channel which I would recommend you do there's a lot of episodes
that talk about my favorite financial vehicle where I put probably 40 to 60 percent of
my serious cash and I would recommend you do that also is in a maximum funded indexed universal
life insurance contract structured with the least amount of death benefit the IRS will let you get
away with and you put in the most money the IRS allows as fast as they allow and it turns into
this tax-free cash cow. Where historically, if I have earned an average return of let's say 11%
I'm netting a 10% internal rate of return cash on cash. That one percent difference is not
tax because these are tax-free. It's the cost of the insurance that the IRS says has to be
there in order for it to be tax-free. But I'm okay with that, it's not really a cost because I get
millions of dollars of insurance coming along for the ride. Nothing's free but I'm not paying for it.
That insurance is being paid for with a miniscule portion of money that would otherwise go out the
window in unnecessary tax. My heavens, I'd have to earn 15 percent in a tax-deferred IRA or 401k in
the market to net 10 after paying tax on those when I retire. Does that make sense? I only have
to earn 11 to net 10 and a max funded IUL policy. So, how does this combat inflation? With indexed
universal life the money you have in there you can choose to link to an index any year you want. So, if
I have a million dollars by the time I retire in an IUL policy let's say. I can settle in a year
if I feel bearish about America. I think we're headed for a recession and they'll just pay me
the general account portfolio rate of four percent or five percent. At four percent that'd be 40 grand
tax-free which as of the recording of this episode is four times as much as banks are paying and
it's actually safer. But anytime I feel bullish about America, I can tell the insurance company
link my returns to an index or indices that they offer. It could be the S&P 500, The Dow Jones,
The Russell 2000, The Barclays U.S dynamic balance index, there's a whole bunch. Let's
simplify it. Let's say you choose the S&P. Now, it doesn't mean the insurance company is putting my
million at risk in the S&P 500 in the market. No, it stays safe in the insurance company
earning four. What I'm giving up is that for sure four percent or forty thousand that year
and I'm allowing the insurance company to use that forty thousand dollars that interest on the on my
million to buy upside options in the index that I chose the S&P. So, that 40,000 of options
if the market goes up it allows the insurance company to pay me eight if the S&P went up eight.
12 may be up to a cap some years there is no cap. Like this year 2021 many of our clients were
chose to go to a no cap in March of 2020 when the market dropped 30 percent and sure enough
in March of 2021, there was no cap in and many clients got credited 61.33%. We had a client with
850,000 in March of 2020 that was worth a million 380,000 in March of 2021 tax-free and if the next
year the market crashed they would not lose one dime of that million five hundred and
eighty thousand if the market went down. Because if the market crashes and you're linked to an index
the options just expire worthless. But the money you started out with is still there. Your money is
not at risk in the market. So, when you combat inflation what you're doing is you're using
indexing to link to an index and I found that when you do that see the linking to the market allows
you to participate on what the economy's doing and the economy is based upon goods and services
that if inflation's happening those are going up in price in value so you're coming along for the
ride. You may not like inflation any more than I do but it doesn't hurt you. Because if inflation goes
to five you know I've earned 10. If it goes to 10 I earn 15. If it goes to 15 I earn 20. If it goes to
20 you know I earn you know 25 and 30 which has happened this year. That's how you outpace
inflation by linking your returns to the things in the economy that are inflating. It's actually quite
simple. But I teach this to financial professionals sometimes or CPAs and attorneys and they go,
"How come i've never heard of this before?", yeah, you can't be aware of something you're not aware of.
You don't know what you don't know. So, let me invite you before I connect the dots here. I don't
want you to miss out. If this is intriguing you, be sure and share this episode this video with
somebody who would benefit by clicking share, post a comment, click like. But most importantly,
subscribe to this three-dimensional wealth channel it's free and then click that little bell
so that you'll be notified every time I post a new educational video which I do almost on a
daily basis. But stay with me to the end, I want to gift you a copy of my most recent 300 page
best-selling book it retails for 20 bucks. I want to give you a copy and I'll show you how to claim
your free copy at the end. Here we go. How do I combat inflation? As I said, I don't really like
inflation more than anybody does but it doesn't hurt me because I'm linking my returns to the
things that inflate by using max funded indexed universal life. If inflation goes to five I've
usually earned you know 9, 10, 11% when inflation was five. When inflation was three then I was earning
eight. When inflation goes to ten I usually earn fifteen. When it goes to fifteen I earned twenty.
As of the recording of this episode this year many people with inflation the true rate of inflation
at 14 or 15 percent. Now, if you're going, "Wait a minute, that's not what. I've heard...
inflation is more like five or six percent. They only gave social security recipients a five
point something percent increase." If you're not aware during the Carter years congress
decided we can't afford to pay social security retirees the actual cost of living increase of 14%.
So, they changed the way that they calculate and report inflation with the CPI, consumer price index.
Basically, they changed from comparing a basket of goods and services to the same basket of goods and
services the next year like an apples-to-apples comparison it's apples to oranges now. So, they can
actually, compare the price of an eight-ounce filet mignon steak last year to eight ounces
of hamburger this year if they choose and they do that. So, when they report the consumer price
index went up you know five or six percent you can almost triple that for the real
rate of inflation. You can see it at the gas pump, the price of meat, the price of used cars, the price
of houses, hello? And so if inflation is 20% you need a strategy where you can earn more like 25%
or higher during those types of years. That's done through a max-funded IUL which I call a laser fund.
Why? Because the IUL has to be structured correctly and funded properly. So, if you want to learn more
about this, I would recommend you claim your free copy of this book. So, it's called The Laser Fund
you click on the link below or go to lasefund.com. You contribute a nominal amount towards the
shipping and handling have some skin in the game. I will cover the rest of that cost and I will pay
for the book and fire out a copy to you, it's 300 pages actually two books in one. This one is 200
pages 14 chapters with all the charts and graphs. If you're more of a right-brain learner you flip
it over and read this one 100 pages 12 chapters 62 client stories. You can read both if you want
to use your whole brain. But folks, claim your free copy but there's options when you're in there to
listen and learn watch and learn. Check out the retire by design virtual events we teach on a
monthly basis. Those are normally $600 tuition. We can waive that and allow you to attend that
at no charge whatsoever. So, check it out study and begin to take ownership of your brighter future
and never let the negative impact of inflation affect your hard-earned dollars again.