[Music] move from mortgage protection to mortgage acceleration what if I could show you how to get out of debt two and a half years Faster by not giving that money to the mortgage company if you give it to the mortgage company there's only only one way to get your money back out of the house and that's a to qualify for a loan and when you need it the worst it's the hardest to get it would be better to put it into an insurance policy you can get the money out any time you want you don't have to qualify for anything they said you know what Americans are making the wrong choice if there sending extra principal payments to the mortgage company a lot of advisors will uh help you get insurance on your life so that if you happen to pass away with an untimely death there's enough death benefit to pay off your mortgage so that your heirs your spouse your widow or whatever will not be uh strapped with that mortgage payment your house can be paid off well that may sound good but there's a far better way to accomplish that goal and actually accelerate the payoff of your mortgage at the same time you can kill two birds with one stone get ready I'm going to blow you away so I'm Doug Andrew and I've been a financial strategist and retirement planning specialist now for five decades helping thousands of Americans optimize their assets minimize taxes and Empower their authentic wealth years ago and I'm talking about 45 50 years ago uh I helped many many Americans uh that were taking out mortgages on their homes where they were interested in mortgage protection in other words they wanted to get some life insurance a Term Policy uh that they could uh purchase to pay off the mortgage if uh the bread winner had an untimely death which is a good goal but then I would go out and say well what if I showed you how you could put money into this insurance contract which was a Max funded index universal life okay if I could show you how to put this money in there and they say well um we don't have any extra money I go well wait a minute here uh you uh have a plan to send an extra you know like $500 a month uh to the mortgage company to get it paid off uh faster right well yeah we want we want to get out of debt faster or I I see here that you are actually interested in a 15-year advertised mortgage instead of a 30-year advertise mortgage well yeah we we figured we could just bite the bullet and and pay a higher uh mortgage payment and our house would be paid off in 15 years I said that's the money I'm talking about you can do far better with that money than giving it to the mortgage company and they go what are you talking about I go okay I've got to teach you how money works and we can move from just mortgage protection to mortgage acceleration what if I could show you how to get out of debt 2 and a half years Faster by not giving that money to the mortgage company well yeah we're all ears okay so in order to do that uh I would say in order to get you out of debt two and a half years faster that means we've got to set up a plan where you can be disciplined to set aside that amount that you're going to send to the mortgage company or you're considering a 15-year advertised mortgage payment which is this let's say and uh you know that a 30-year aded mortgage payment is less so I'm going to calculate the difference between the 15year advertised mortgage payment and 30-year but I'm also going to calculate the tax savings you will achieve during the first 15 years of a 30-year mortgage uh and instead of just having that go down the drain we're we're going to also use that okay so instead of just the difference it's also going to include the tax savings you will achieve during the first 15 years of a 30-year mortgage by not killing your partner Uncle Sam by paying down the mortgage and getting rid of that tax deduction does that make sense oh yeah so I would create the illustration and we would set aside that difference then I would punch it into an hp12c calculator and they would be flabbergasted and I remember doing this with three Finance professors that taught their Advanced students uh why they should take out a 15-year advertised mortgage uh instead of a 30-year on the purchase of their first home to save a bunch of interest and I said gentlemen your Finance professors haven't you ever taken that differential between a 15-year advertised mortgage payment and a 30-year advertise plus the tax savings and put it into a a side fund compounding taxfree and then they would go well what's taxfree and then I had to explain to them what a property structured Max funded indexed insurance contract was and why it's income taxfree well no we've never done that then they were flabbergasted when they saw that in 12 1/2 years there was enough money in the max funded index universal life and if it's structur CL it's called a laser fund liquid asset safely earn and return spells the acronym laser uh they would have enough money in 12 and A2 years to totally pay off the 30-year mortgage two and a half years faster than the same money given to the 15-year mortgage okay and uh they were blown away and not only that you had liquidity and safety you could access money in the event of an emergency you give you give them money to the mortgage company there's only one way to get it back if you need it back if you're unemployed you get sick you get disabled the number one cause of home foreclosure in America is physical disability well the chance of you having a a temporary Financial disability is even greater if you give it to the mortgage company there's only only one way to get your money back out of the house and that's a to qualify for a loan and when you need it the worst it's the hardest to get it would be better to put it into an insurance policy you can get the money out anytime you want you don't have to qualify for anything uh too many people learned that lesson the hard way well and I did by the way back in 1982 so I often ask what do you get when you multiply one negative by another negative okay ative -2 * ative -2 equals what a positive four well what am I talking about most people view um pain interest as a negative well I got to hurry and get rid of this interest I'm paying not Banks and Credit Unions not insurance companies they are multi- trillion dollar institutions and they would wither up and die if they stopped paying interest they don't view interest as a liability it's it's it's one of their greatest assets is their liabilities okay if they stopped borrowing OPM other people's money and paying interest they would wither up and die but they learned how money Works they understand that by paying interest okay uh they can then use that money and make higher interest than what they're paying by two or three times you can too I'm going to show you so uh paying interest is not a negative it's a positive but sometimes people view Insurance oh I've got to put insurance on myself or on my house that's a negative no I'm going to show you how to take that perceive negative and and make it a a huge positive and that's by putting that extra money okay that you would be tempted to give to the mortgage company an extra principal payment put it into a compounding account tax-free in insurance policy and insurance contract and that's what helps you pay off your house two and a half years faster two negatives turn into a huge positive now let me just make sure you understand a mortgage an advertised mortgage okay as you pay it down you're paying simple interest uh on a declining balance tax deductible if I I borrow money at 6% interest in a 33% tax bracket it doesn't cost me 6% it cost me a net of four okay on a million doll mortgage I'm paying 60,000 but I get to write off 60,000 on my tax return as tax deductible interest if I do it right uh in a 33% bracket I saved onethird of that 60,000 deduction in tax which is 20 grand so the net cost of a $60,000 interest is only $40,000 because I get $20,000 back at a tax refund or or or 20,000 less taxes I pay does that make sense uh if I borrow money at 4 a half% tax deductible interest it's a net cost of three well over here in my laser fund I'm earning compound interest taxfree if I'm earning compound interest like I have uh 9 to 10% net internal rates of return how much more is nine than three don't say six it's three times it's 300% more on a million doll mortgage I'm paying at at 4 and a half% tax deductible interest a net cost of 3 or 30,000 a year but I'm making 990,000 over here that's just the first year by the way I make 990,000 it cost me 30,000 would you hire an employee for 30 grand if that employee made you an extra 90 grand that's called a 300% return on employment cost business owners understand this would you buy a widget machine for 30 grand that made you an extra 9 Grand that's called a 300% return on equipment you can make 300% rates of return this is compound interest taxfree compared to simple interest declining balance tax deductible uh sometimes I borrowed money at at 3% tax deductible interest a net cost of two and I've made 10 over here I've made 500% more I don't care if you borrow money at 6% tax deductible interest to net cost of four and you only earn eight over here how much more is eight than four 100% more that's 100% R of return pretty soon this compounding account over on this side will uh compound to an amount equal to be able to pay off the mortgage two and a half years or sooner by not giving it to the mortgage company okay but it's liquid and safe over here if you give it to the mortgage company there's only one way to get it back out of that house and that's to borrow or sell the house are you getting it okay so I've helped thousands of people get out of debt yeah there's quick and smart way send extra principal payments do a 15year mortgage there's smarter and quicker ways but the smartest and quickest way is not any way ship perform sending extra principal payments to the mortgage company I can prove that to you mathematically all day long now sometimes it begins by understanding the difference between preferred and nonpreferred interest expense so let me back up again if I have two couples and they both make 72,000 a year one has 12,000 of interest that is nonpreferred it's it's on automobiles or things that are not deductible they have 60,000 after uh paying the interest okay that's how much they have before tax uh if I have a couple that makes 72,000 they have 12,000 of Interest that's secured by a a piece of real estate their home or a rental property that is deductible they have the same 60,000 but what's the difference this couple has to pay tax on the full 72 this couple only has to pay tax on the 60 cuz it was is deductible that's a difference of taxable income of 12 Grand in a 33% bracket this couple is paying out uh 4,000 more this couple is saving 4,000 of otherwise payable tax that's real money it's not paper money okay that's what I'm talking about here so you want to leverage with full liquidity now the people who leverage without liquidity that's stupidity let me make sure you understand what I'm talking about if somebody says I've got 500,000 of cash um I could pay cash for this piece of property okay that now now you own it free and clear but now it's earning the equity is earning nothing I mean the house is going to appreciate or depreciate regardless of how much Equity is in it Equity has no rate of return only when you separate it does it have the ability to earn a rate of return but let's say that you say well okay I'm going to put a 100,000 of my 500,000 uh in a 20% down payment on a $500,000 rental home and another 100,000 on the next rental home so you buy five rental homes now you have 2 and a half million of real estate but all of your 500,000 of liquid cash is tied up in down payments on those properties you leveraged 500,000 into 2 and a half million of real estate with no liquidity that's stupid if you get into trouble and you have vacancies or we have a recession there's only one way to get your 500,000 back and that's to sell those properties or to borrow and you can't qualify for a loan and if you sell it in a depressed Market you're going to be lucky to get 80 cents on the dollar you just lost your half a million I've seen it happen thousands of times not me I keep my 500,000 over here in a laser fund now I satisfy down payments but not with my money I do first mortgages 80% loan to value and then I take out a second mortgage uh for the last 20% so I borrow 100% And I keep my 500 Grand over here not only that but as the property keeps to keeps appreciating I have the wherewithal when I have positive cash flow I keep it accumulating over here I don't give it to the mortgage company if I get into trouble I can peel off the interest on my money over here and make all the mortgage payment pays okay I can take the money and and keep the properties I'm I'm not subject to the whims of the mortgage lender I have liquidity so when you leverage without liquidity that stupidity are you getting it okay now let's go back to the math um one time um there was this company that had the software that they sold for $800 and uh they said listen if you buy this software it'll show you which credit card you should pay off first if you want to get out of debt uh the 18% interest credit card or the 12% interest this isn't rocket science you don't need software for that but basically you've seen where they tell you okay you pay off the highest interest credit card first and then and then you take what you were paying on that and you pay it to the next and the next and next one then you pay off your car loans and then you put all that money against your mortgages okay so their software showed this person taking all of this money they were paying on automobile loans and credit cards and plowed against the mortgage and wow in 12 and 1/2 years you pay off your mortgage now your house is paid off now you take what you used to pay in all those payments and you put it into a tax defer IR 401K let's say earning 8% and you end up with just under a million dollars in a tax deferred account that's good but I have a little diddy good better best never let it rest never let it rest till good gets better and better gets best that may be a good way to go but it's a far cry from the best way you want to see the best way well let's start with the Better Way first instead of this uh see you have 987 th000 in attach to fer Ira if I go to access money out of that I have to pay tax a third of that belongs to Uncle Sam I'm really only netting about 650,000 after tax so far so good I can show you how to have double that by by not giving the mortgage company so here's a better way uh instead of giving it to the mortgage company I take all that extra money uh by paying off those credit cards and extra principal payments and I put it into a laser fund compounding tax-free and I'll have enough money in 10.2 years 2.3 years sooner in my laser fund to totally pay off the house let's say I physically do that I'm out of debt 2.3 years sooner now that will grow to a, 245,000 which is twice as much money as this method was after tax this after tax is only worth 650 this is worth double that that's a better way you want to see the best way when I have enough money in 10.2 years to pay off the mortgage I physically don't do it why would I fire an employee that's making me double or triple what they're costing me that's dumb I am out of debt on my balance sheet my assets anytime with the electronic funds transfer a phone call I can pay off my mortgage in 10.2 years by continuing to earn 100 to 200 to 300% more than the cost of the mortgage I will end up with a, 800,000 at the end of the same time period instead of just a net of $600,000 triple three times as much money using the same dollars that's the best way to get out of debt so the difference is the the the the good way you're going to pay 96,000 in taxes because you killed your tax deductions or the better way is you're still going to pay 83,000 in taxes the best way you pay zero in the same uh illustration good better best uh the difference between what you put in and the the difference of what you accumulated here is a half million the good way three4 of a million the better way it's a milli 250,000 you turned out to the better the best way math doesn't lie good better best I'd end I'd rather end up with a mil 242,000 net after having a, 800,000 accumulate taxfree you can do this now if you don't take my word for it take the Federal Reserve Bank of Chicago's word for it when I explained this in my second bestselling book Misfortune one1 that became a bestseller uh I proved this mathematically in the book and the Federal Reserve Bank of Chicago were is given a challenge would you please check Mr Andrew's math after about three months of intensity study these three gurus came out with the trade-off between mortgage prepayments and tax deferred retirement savings they didn't even use a tax-free U laser fund they said you know what Americans are making the wrong choice if they're sending extra principal payments to the mortgage company they said uh those mortgage over payments are a misallocation of funds in their opinion you would reap a substantial gain if you did not do that if you would put it into a compounding account instead of giving the mortgage company you'd come out way ahead you'll get out of debt faster and they called this a rather conservative approach there you go uh they're the gurus and they verified what I have been talking about for years so if you want to learn more about how to do this I would strongly recommend that you claim a copy of my book the laser fund I'll pay for this book uh it retails for 20 bucks on Amazon it's been flying off of our warehouse shelves and if you buy it on Amazon thank you but I'll gift you a copy free 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 I'll pay for the book why should you claim a copy it's actually two books in one this side 200 Pages 14 chapters with all the charts and graphs if you're a left brain learner if you're a right brain learner you learn by stories you flip it over 100 Pages 12 chapters with 62 actual client stories but this will show you how to diversify bu and create the foundation for a tax-free retirement and just a byproduct is you can get out of debt two and a half years faster and end up with three times as much money than the way that most Americans go about getting out of debt and paying off their house okay how to become your own Banker now when you go in and claim your free copy if you like to listen and learn or watch and learn there's uh those formats uh you can register for a free uh educational webinar which we teach on a regular basis but if you want to talk to an IL certifi ifed professional you can schedule an appointment with no cost or obligation and uh they'll show you how this may work in your particular set of circumstances and make sure you do it right because if you don't uh it's going to cost you if you go to an ilul agent who does not know how to structure your IL correctly and help you fund it properly to accomplish what I've been talking about here so don't make that mistake uh meet with a certified professional and do it right the first time [Music] a