how iul is the dream solution for a myriad of financial goals well why are you continuing to postpone procrastinate paying tax to some future perceived unknown advantage and then withdraw your money out of an IRA of 401k uh when taxes are going to be higher most advisors usually use life insurance for death they should call it death insurance we use life insurance for living benefits for taxfree accumulation access and transferability uh for the living benefits so that every million dollars can generate a 10% payout without depleting principle in this episode uh I'm going to go through and address several different um ways that I have successfully Incorporated property structured maxf funded index universal life to achieve all kinds of financial goals for thousands of clients in the five decades that I've been helping people optimize assets and minimize taxes so I'm Doug Andrew and um I've been a financial strategist and retirement planning specialist now for 50 years and uh when I tell people that my favorite thing is helping people optimize their assets and uh minimize taxes they say well what's the best financial instrument or investment uh that you've recommended without question I go well a properly structured maxf funded index universal life because it is the dream solution for a myriad of financial goals uh it's like a financial Swiss army knife and so I began to use that metaphor and let's just go through them one by one i' I've done various episodes on this but let me go through and summarize the ways that it's it's a dream solution so uh as a dream solution it means it's going to contain some key elements of prudent investing uh and I have those in order liquidity safety rate of return the tax benefits in that order and that's why uh we call these uh liquid asset safely earning returns which spells laser okay that's why I call it a laser fund if it's been properly structured a maximum funded it passes the liquidity safety R return test with flying colors and it's it's the most beautiful tax advantage instrument in the entire Internal Revenue code in my opinion okay so um when we set up an IL you have to justify uh a death benefit okay uh most people never came to me uh uh primarily with the goal of wanting or needing a death benefit even though they love that whatever they set aside if they happen to die uh that it would be self-fulfilling because it would blossom into a death benefit okay but uh the majority of my clients at least 50 to 60% of them would come to look at ways to um sock away their money for future goals like retirement better than IR at 401K so they would not outlive their money due to the negative impact of taxes inflation and Market volatility so retirement planning became a very popular uh objective it's the dream solution in my opinion a property structured Max funded iul knocks knocks the socks off of a an IRA 401k or even a a Roth IRA 401K let me explain quick why see a lot of times people I think are duped into putting money into pre-tax 401ks or tax deductible contributions to IRAs or 457s or 403bs or the like uh being told oh you'll likely be in a lower tax bracket when you retire well that has not been true or axiomatic now for over 30 years most Savers in America uh when they hit retirement they're not in a lower tax bracket okay uh several reasons for that but basically uh it's because you've continued to defer procrastinate and if you're a saver now you have a pretty good Nest Egg but uh you're not in lower tax bracket you've actually been killing your tax deductions probably uh because you paid off your house uh the kids are gone and and even if they move back in as adult children you can't deduct them anymore you're not contributing money to IR raise a for1 case in retirement so you don't have those deductions anymore uh if you're a business owner and you sold your business you don't have those deductions anymore and uh what else well Congress because of irresponsible government spending and the printing of money uh taxes are going up most Americans when I ask them in an audience how many of you think that taxes in the future will likely be lower I get nothing but crickets how many think they're going to be the same one or two people raise their hands but when I say how many think the taxes will likely be higher see of ANS goes up and I go well why are you continuing to postpone procrastinate paying tax to some future perceived unknown advantage and then withdraw your money out of an IRA of 401k uh when taxes are going to be higher and they just look dumbfounded like I don't know that's that's like you put it that way that's really stupid yeah and so sometimes people say well what's better is is a Roth better well yeah it is a step in the right direction roths were passed in 1997 but the government didn't do it for you they did it for themselves they didn't want to wait around till people retired to get the required minimum distribution taxes on those IRAs of 401ks they needed tax revenue so they knew that Savvy people understood that it's better to pay taxes U sooner than later and enjoy tax-free from that point forward so they want to convert to a Roth and and pay the tax and then enjoy taxfree income thereafter and that created a windfall of tax revenue for the government uh it was a step in the right direction but um I've never owned an IRA for 1K never will but I've never owned a Roth ir 41k and never will because my favorite vehicle a Max funded iul uh which if it's structured correctly is deemed a laser fund liquid asset safely earning returns it knocks the socks off of any Roth that I've ever uh seen roths have basically two advantages you fund them with after tax dollars like you do a laser fund but your money accumulates tax-free you can access it taxfree a laser fund is say those two ADV manages for over 108 years now in the Internal Revenue code section 72e 7702 and 101a it's the only vehicle in the Internal Revenue code in fact that allows you to accumulate your money taxfree then be able to access that money income tax free and when you die uh anything left behind blossoms increases in value and transfers income tax free under those three sections of the code well if you use a laser fund it has four additional advantages Ross will never have in a nutshell um I can set up a laser fund to accommodate 30,000 a year of contributions uh uh 300,000 a year of contributions if I'm a business owner you can't do that with a Roth in fact if you make too much money you can't even own a Roth that's why Savvy CPAs and tax attorneys refer to the laser fund as the rich person's Roth and I Snicker because you don't have to be rich to have a laser fund uh you can set one up for 500 bucks a month but see uh if you make too much money you cannot have a Roth so you can you can design it to accommodate 300,000 you can put in 30,000 you don't have to put in anything is that flexible now uh what's another Advantage well if you put in 300,000 let's say during a banner year and then um a few months later you see an opportunity or you need money you need to access 200,000 of the 300,000 you can't do that with the Roth you can't access money for 5 years until you're 59.
Half without a 10% penalty in a laser fund I've had people put in 300,000 uh for a year or two and they're not even 40% funded they can go grab 200,000 with an electronic funds transfer phone call there's no 10% penalty so I have flexibility to access the money and become my own Banker okay uh what's the next Advantage indexing rths don't allow you to uh be able to link to the market to where your money participates when the market goes up but not lose when the market goes down because your money is not at risk in the market it's called indexing I'm not talking about an index index mutual fund uh the sixth Advantage um is roths don't Blossom when you die uh if I happen to die in an accident tomorrow every million I might have in a portfolio of laser funds I would Blossom to about two and a half million and transfer taxfree to my heirs and people go whoa well how much does that cost well nothing free but it doesn't cost me anything it's being paid for with a minuscule portion of money that most people shell out an unnecessary tax okay and so for uh retirement planning it knocks the socks off of iiser 401ks or Roth aaser 401ks why would you mess around with them okay with all those rules now what about college savings plans many Americans are socket away money for their kids or grandkids for for college and then uh they put it in a 529 uh plan so that it accumulates uh under a tax advantaged umbrella and I'm going yeah but that doesn't allow very much flexibility what if your child gets a scholarship or doesn't need the money what if they work their way through college like I did and my kids did uh if they want to use the money in that 529 plan for a down payment on a home or to start a business because they got a scholarship uh they have to pay tax on that 529 money now why why do that uh why have all these strings attached if I use a laser fund for my College funding for my kids and grandkids it's always tax-free no matter how they use the money they don't have to use it for college and it's still taxfree but again if I'm shocking away money into a laser fund for College funding and I happen to die all of a sudden the College funding is is is funded in W one F swoop because it blossoms to a death benefit taxfree so uh if I set it up I'm I'm socking away 500 a month for towards my grandchildren's college and I die all of a sudden there's going to be 100 Grand 500 Grand a million dollars in that account instantly because of the death benefit 529 plans don't do that uh let's look at business owners many times I'll run into a business owner and they have working capital accounts uh because we need money in the bank or whatever accessible to be able to buy inventory as an author I print usually 15 20,000 books at a time and uh then I go through and as I ship those out in a few months I need to print another 15 or 20,000 well you've got to be able to write out a check for 30 40 50 Grand uh to the printer every time you do that so it behooves me to have a working capital account well instead of having your money sitting in a bank or credit union earning next to nothing I put it in a laser fund because it's liquid it may not be a drive up window but it's still very very liquid I can access money within 24 48 hours and I'm earning more like 5 10 15% rates of return on my working capital but when you understand how money works here this uh many Savvy business owners they understand uh how to become their own Banker so for example in 2017 one of my business owning clients he borrowed a million out of his laser fund why did he borrow well because he understands that if he leaves uh the money in his laser funds he had over a million in there so he left the million there in his laser fund and in 2017 he got credited 25% tax free 250 Grand on a million dollar but he needed a million to tie up a piece of property that he was going to fix up and flip and make two or three million out rather than withdraw a million out of his laser fund he borrowed a million from the insurance company he does have to qualify because the insurance company will loan him uh the equivalent of the money that he has in there cuz they've got the collateral by doing that um they'll charge him 2% 4% 5% interest depending on what kind of a loan he does if they charge him 5% on a million dollar loan that's 50,000 after a year but they credited him 250,000 uh he made a net of 20% or 200,000 on his money while he was actually using it in his business this is incredible that's a working capital account the same is true with Real Estate Management I've run into many Real Estate Investors and they make the mistake of taking positive rental cash flow and uh oh okay well I don't need this money so I'm going to pay it against the mortgages and I showed them mathematically why are you doing that what if you need that money back now you're going to have to borrow it back from the from from the mortgage lender again uh many landlords get into trouble so the Savvy landlords do what they take the positive cash flow they keep their properties mortgage to the hilt and like I have done for years they borrow money at at let's say 42% tax deductible interest or 6% tax deductible interest but in a 33% tax bracket uh 4 and a half% is really a net cost of three 6% is a net cost of four in their laser funds they're earning eight nine or 10 how much more is eight than four it's it's 100% more how much more is 9% than 3% it's 300% more would you hire an employee for 30 grand that made you an extra 90 grand would you uh buy a widget machine for 30,000 that made you an extra 90,000 they're making 300% rates of return on their money while they're making money on the rental property anyway so they take the positive cash flow put it into a laser fund and the laser fund compounds and grows tax-free at three times the net cost of the mortgage and they will actually have enough money to pay off the mortgages two and a half years faster than if they sent the money to the mortgage company and killed their best partner uh Uncle Sam in the process getting rid of that tax deduction is that making sense it's an incredible dream solution for Real Estate Management well what about an emergency fund do you know in 2008 when um 400 Banks went under 900 more were on the watch list on the brink of going under and that's when the federal government asked the five major banks in in America to disclose where they have their tier one assets for liquidity and safety guess where they had it Banks and Credit Unions had their money in to in the multi- trillion ion dollar insurance companies and they were paying you who put money in their Bank 1% interest at best and they were turning around and making 5% or more in the insurance company how much more is five than one don't say four it's 500% more on every million they were paying 10,000 annual interest they were earning 50,000 of annual interest that's 500% more you can do the same thing bypass the middleman but they also increased the safety because most of these insurance companies that they put their money in were ranked Triple A most banks were only rated Triple B they took your money and increased the safety by six notches and increased the rate of return by five times you can do that with your own emergency funds in this day and age you can get your money within 2448 hours with an electronic funds transfer phone call how about a lump sum Capital transfer is what we call it there's a lot of people that experience lump sums of money a little windfalls maybe a settlement from a car accident uh maybe an inheritance maybe from the sell of a business uh maybe an early out option for retirement whatever it is they come and they say Doug what what do I do with this lump sum that I just got this 100,000 this 500,000 I go well how would you like to have that 100,000 or that million uh generate a a 10% payout a 100 Grand a year of taxfree income well where do you get that in a laser fund because every million can generate that kind of a cash flow if you need it tax-free or uh you put it into a Max Fant insurance contract and if you have it a pass away uh it leaves behind double or triple what is in there okay other accounts will not do that it knocks the socks off of other Alternatives that's the dream solution for any lump sums you get well estate planning many times people are trying to maximize what they leave behind to their kids and grandkids when they die and uh so they sometimes times get life insurance in order to cover expenses such as uh estate tax inheritance tax or maybe it's so that their posterity will not have to pay off the debt well life insurance is a way to pay off or SLE of those things for pennies on the dollar so they buy insurance for that benefit I'm saying well why why would you just have insurance to do that you maximum funded every million dollars you put into a Max funded ilul can generate ,000 a year of of taxfree income without depleting principle based on actual historical performance but why would you leave behind you know a million uh when you die when you could leave behind uh you know three million if it doesn't cost you anything and people go well why doesn't it cost you anything well Insurance isn't free but it comes along for the right it's being paid for with a minuscule portion of money that would otherwise go out the window and unnecessary tax you'd have to be earning 15% to Net 10 in any other kinds of investment with the max funded iul you only have to earn 10 to Net 10 but in actuality with rebalancing and diversification I've earned 11 and Net 10 that 1% difference pays for the insurance that if I have it a dieet it it'll lead behind three times as much money I'm not paying for it it's being paid for with money that most people shell out in unnecessary tax does that make a little bit of sense there for you uh I'm going to show you how you can learn more about this but uh when we talk to school teachers please officers firefighters uh many times they don't realize when they go to retire the state offers them a defined benefit pension based upon the years of service if they taught school for 30 years or whatever and they show them the benefit but then they say well you ought to take a reduced benefit so that your spouse will continue to get a benefit if you happen to die first well it sounds pretty good but what if your spouse dies before you oh they say Well if you get remarried no no we will not pay it to another spouse and we don't give it to your children it's only throughout your lifetime well that's the stupidest most expensive insurance policy you'll ever buy why would you do that you can take the maximum uh benefit uh from your pension take the differential between that and the Survivor uh benefit amount put that into a laser fund and it doesn't matter if your spouse passes away before you you can rename new beneficiaries and your children and you can access the money it is far better use of that money and it will leave behind more it will generate more than the state's pension plan will on the same dollars I assure you well uh what about general tax reduction this is very popular this is where so many people they follow the herd they put money in in tax to her Dias of 401ks and then they realize they're in a tax trap so I have to free them from that and we do strategic rollouts not a rollover that's a roll out this is where you're getting the money out of those IRAs in 401ks strategically getting the taxes over and done with sooner than later repositioning the net after tax money into something a laser fund that's going to be taxfree from now on and when you di it Blossom and transfers taxfree it will do far better than leaving the money in 401ks and taking rmds so uh in my book I want to gift you there's stories and examples of how we took uh a husband and wife both School teachers and we saved them a quarter of a million bucks of unnecessary tax and doubled their income over following the herd and keeping their money in 40 fre in 401 case I took a real estate landlord and saved him 3/4 of a million of unnecessary tax and four times to it come over where his money was in his 401ks we took a husband and wife both uh Physicians they had 4.6 million saved and they were going to end up paying 2.6 million in tax by taking rmds and sprinting it out uh I could not save them the 2.6 million in tax I saved them 1.2 million that 1.2 million we saved them in ta taxes generating 100,000 a year of taxfree cash flow they absolutely loved doing that strategic roll out we took a couple in California from the highest tax bracket to a 0% tax bracket in four years and one day they uh had 6 million in iriser 401ks bit the bullet paid a third 2 million in tax put the net of 4 million into laser funds four laser funds that 4 million in 7 and 1 12 years doubled to 8 million they now have 8 million taxfree and they're in the lowest tax bracket a 0% tax bracket we do this all the time so uh when we look at it many times I'll ask audiences golly what are some uses for baking soda and usually usually the women in the audience will say well it takes the odor out of the refrigerator uh you can soak in the tub uh the men use it to clean their battery terminals and then finally somebody goes oh it's good for baking yeah the obvious baking soda well it's amazing we use uh life insurance for Life most advisers usually use life insurance for death they should call it death insurance we use life insurance for living benefits for taxfree accumulation access and transferability uh for the living benefits so that every million dollars can generate a 10% payout without depleting principle it's far better than all these other Alternatives like I is in 401K so I say don't focus on what it is yeah it's life insurance people say well I don't need any well okay what does that have to do with it make me the beneficiary look at what it does when I show people what it does they go well this is by far better than all these other Alternatives what is it I goes life insurance oh we don't need any insurance I'm going okay then again make me the beneficiary quit quit getting hung up on what it is look at what it does so if you want to learn more I would strongly recommend you study and immerse yourself in my 300 Page book the laser fund this is actually two books in one uh the white covered side is about 200 Pages 14 chapters with all the charts and graphs and explanations if you're a left brain learner if you're a right brain learner you learn more by stories you flip over to the orange side this is about 100 Pages 12 chapters with 62 you know actual client stories if you want to use your whole brain then then read both Books Okay uh but you simply go to laser fund.com or click on the link below contribute a nominal amount towards the shipping and handling I'll cover the rest of that cost and pay for the book I'll fire out a hard copy to you via Priority Mail while you're in there claiming your free copy if you like to listen and learn watch and learn there's those formats but we teach regular educational webinars they're free you can uh register for one of those but if you want to talk to a certified ilul professional then with no cost no obligation you can schedule an appointment a quick consultation Absol absolutely free with an IL professional that I oversee to see how the this may help you in your particular set of circumstances without increasing your outlay one dime they can show you how much better off you would be by optimizing assets and minimizing taxes using a laser [Music] fun