Live Abundant Radio with Doug Andrew

The LASER Solution Doug is a big proponent of people taking the time to educate themselves on the different options that exist for pursuing abundant living. There are many different financial vehicles available so it's important to find the ones that are the best fit for you. With that in mind, here is a brief overview of a solution you may find worth exploring as part of an approach to adding to your better financial health. It's based on the three marvels of wealth accumulation. 1. Compound interest. 2. Tax-favored accumulation. 3. Safe positive leverage which is the ability to own and control assets with none of your money tied up or at risk in the asset. Personal financial disasters usually occur when one is highly leveraged with very little liquidity. The principle of leverage isn't bad in and of itself. Actually, it's the very essence of how money works. Safe leverage has created untold amounts of wealth in the world where a win-win is created over and over. When institutions like banks or credit unions borrow OPM, or other people's money, they pay a low interest rate to the people who lend it to them by depositing the money in their institution. They then turn around and loan that money at higher interest rates to earn a net spread. Earning interest is a win for the saver while paying interest to the saver is a win for the bank. This is because they then loan out the very same money at a higher rate. If a bank pays 1, 2 or 3 percent interest on savings accounts, they turn around and loan at 5 or 6 percent or higher. On just one million dollars, they may pay only $10,000 to $20,000 of annual interest. However, they are earning $50,000 or $60,000 or more in interest on the money they loan. As a business owner, would you be willing to hire an employee for $20,000 if that employee made you an extra $60,000? Would you buy a widget machine for $20,000 if the machine made you an extra $60,000? In either case, that would be a 300% return on your employee or equipment cost. The point here is that leverage isn't bad. It's leveraging without liquidity that gets people into trouble. This wisdom is what motivated Doug to help people protect themselves from the negative impact of TIME. This stands for taxes, inflation, market volatility, and economic uncertainty. One accomplishes this protection by maintaining LASER focus. The acronym LASER stands for liquid assets safely earning returns. All of Doug's serious cash that he's earmarked for financially funding his personal bank in perpetuity, must meet the LASER test. The three key elements of a prudent investment include liquidity, which means the ability to access your money with a phone call or an electronic funds transfer without triggering taxes or penalties. You can't do this with an IRA or a 401(k). The second element is safety of principal. This is the ability to preserve your principal and to protect it from loss. Also, any year that you make money, you want to be able to lock in the gain and have it become newly protected principal so you don't lose what you made in previous years due to market downturns. The third element is rate of return. You want to be able to earn a competitive rate of return, tax-free, that historically has beaten inflation because it is linked to the goods and services that inflate. Why Tax-advantaged Savings Matter As an additional benefit, Doug prefers the financial vehicles that meet the LASER test and that also have tax advantages. Fewer taxes equals more cash for you, your family and your retirement. Virtually no one thinks taxes are going down in the future. Some estimates say that taxes may go above 50 percent for many Americans in the future. Our government is addicted to spending on programs like Medicare and Social Security and other government initiatives. Uncle Sam's appetite is only getting bigger. With taxes on the rise,

Remember the Rule of 72 Abundant living requires a willingness to ask ourselves key questions from time to time regarding our intended course for the future. The right questions can help us avoid distractions or flat out money myths that could affect our ability to reach our goals. Here are a few questions you may find useful. True or false? Halfway to retirement, a person should have half of the money he or she will need for retirement. This one is false. Let's imagine that a person will graduate from college and begin his or her profession at age 23 with plans to retire at age 65. They'll be looking at 42 working years. Keeping in mind the rule of 72, if we’re earning 7%, our money will double about every 10 years. Now, if we’re averaging 10%, that means our money will double every 7.2 years. This means that in 42 years of working and saving, if we divide 7 into 42, our money should double 6 times. Imagine we started out with $100,000 and it doubled every 7 years, we'd end up at $6.4 million at the end of those six periods of doubling. Notice how in the last 7 years our growth accomplished what it took the other 5 periods to accomplish combined? This means that the last 7 years of retirement ofttimes is where we’ll double whatever we’ve accumulated up to that point. It's unreasonable to expect to have half the money we'll end up with when we're only half the way to retirement. With 7 years to retirement and a 10% rate of return, we’ll actually have twice as much as whatever we’ve saved in the preceding 36 years. Is 10% a realistic rate of return? Yes, it's very achievable. Especially once we fully understand and have implemented the strategies that allow for liquid assets safely earning a predictable rate of return. The lesson here is simple, people don’t get wealthy by putting their money into tax-deferred vehicles such as IRAs or 401(k)s. Instead, they put the power of tax-free accumulation, access and distribution to work for them. A Few More Questions Consider a few other true or false questions to help us chart a more clear course toward our brighter future. True or False? If we deposited ten thousand dollars in an investment account earning, say, 10%, it will grow to more money than if we had ten different investment accounts with only $1,000 in each earning the same 10%. Which will grow the most? A bigger sum in one account earning 10% interest at the end of 20 or 30 years, or a thousand bucks in ten different accounts earning the same rate of return. Actually, there is no difference whatsoever. A great many people wrongly believe that if having more money, at a given rate of return, in a particular account will cause it to grow to a bigger sum than if they split the same amount up into a number of different accounts at the same rate of return. Here’s another question. True or false? During the worst times in America economically–including the Great Depression and numerous recessions–real estate or banks have always been the safest places to have one's money. That is false. In reality, during the Great Depression, some real estate dropped as much as 80% in value. This means that many people saw their hard-earned equity vanish overnight. It can also happen during recessions like the one that happened in 2008. What we must learn from this is that real estate can be of the least secure places to keep our money when the market tanks. Also, never forget that during the Great Depression, many banks closed. As much as 40% of those banks never opened again. They were finished. Historically, the best place to keep one's money during the Great Depression was in the life insurance industry since the legal reserve insurance companies came through that mess with flying colors. The rates of return during that time we low, often around 2-3%. Most importantly, people didn’t lose their money and kept earning that rate of return tax-free....

Truth or Falsehood? How well do you know your money myths? There are an awful lot of people who have bought into money myths that can come back to bite them at retirement. They may feel safe in doing what the rest of the herd is doing but it's a false sense of security. Doug has pulled together a short list of true or false questions to help folks evaluate which myths are potentially leading them astray. You might be surprised at what you learn. True or false? Taxes will likely be going down or staying the same for you in the future. The truth is that a rude awakening awaits many people whose taxes are headed just one direction: up. The General Accountability Office or GAO has predicted that, because of the national debt and continued out of control government spending, taxes are not likely to go down. In fact, they may be headed up dramatically and not just for the high income earners. A lot of folks who think they'll be in a lower tax bracket at retirement are forgetting that many of their favorite deductions will be gone by the time they retire. The answer to our first question is going to be false for more than 90 percent of retiring Americans who will see their taxes increase just when they most need their money. This will be especially true of those who have been putting their retirement money into tax-deferred IRAs or 401(k)s. Here's another true/false question. Which is better, a regular IRA or 401(k) where you put in pre-tax dollars, or a Roth IRA where the seed money is taxed and your money then accumulates tax free? The surprising truth for most people is that both will produce almost the same result. It doesn’t matter whether you put in $300,000 pre-tax and it doubles to $600,000 over a period of time. When you take out $600,000 and then you pay a third of that in tax during your retirement, you’re only going to net $400,000. If you put after-tax money in a Roth IRA or 401(k), you’ll have paid roughly a third of that $300,000 on the front end. This means you only have $200,000 which, if it doubles, still nets you only $400,000 at retirement. Remember, this is only if you stay in the same tax bracket and your taxes don't go higher. Looking For a Better Way WIth so many Americans putting their money into IRAs and 401(k)s, too many are forgetting that they'll need to deduct the taxes they'll have to pay and also figure in the effects of inflation. What's the difference? The difference is that taxes aren't going down and your deductions are going away as your mortgage is paid off, your children move away and you stop contributing to your retirement savings. What this means is that even those who are receiving less income than they did while working can still end up paying more in taxes. It means that a lot of Americans will find themselves in the same or higher tax bracket when they retire. If that's the case, a Roth IRA will give them roughly 33% more net spendable income in retirement than a traditional IRA or 401(k) There are some benefits to having a Roth IRA but there are also strings attached. What if there was a way to save for retirement with all those benefits and no strings? One last question. True or false? IRAs and 401(k)s are typically the best way to save for retirement. In Doug's opinion, this statement is 100% false. They're not the best way to save even though it sometimes appears that everyone else has chosen to do it that way. People who choose to save in tax-deferred vehicles are helping our government fund its future by taxing away a third of everything they've built up in their retirement account. The best possible way to save for retirement is to accumulate your money and transfer it and access it tax-free. This method will give you fifty to one hundred percent more than any Roth can do with the same rate of return. Now you should be starting to recognize how some money myths can hurt you in the lon...

The Power to Generate Wealth What's the difference between a nest egg that generates long-lasting wealth and a limited supply of income that can be depleted? It's the difference between getting your power from a generator and getting it from a battery. A battery can provide needed power but only for a limited time. A generator, with the right fuel, can provide power for a much longer period of time and usually in greater quantities. In Doug's 40 plus years as a financial and retirement planning specialist, he's discovered that many financial advisors have a battery mentality. It's how traditional financial wisdom has taught them to think. This means that they follow conventional wisdom in how they tell their clients to approach retirement. They encourage them to save in traditional IRAs and 401(k)s with the intent of charging up their financial battery by saving just enough. This is one reason why many in the financial services industry have adopted the 4% rule which establishes how much you can withdraw from your nest egg each year. They're banking on 4% being enough to provide a slow but steady flow of retirement income without depleting your nest egg before you outlive it. Your life expectancy is being weighed against the amount in your nest egg. This may be problematic for a number of people since, according to DALBAR, folks in the stock market have only averaged 3.49% over the past 20 years. If they're taking out 4% every year but only averaging 3.49%, they will deplete their nest egg sooner than later. Let's illustrate what that means. Factors That Drain Financial Batteries If you had a nest egg of $1.25 million saved up, you'd realize a net spendable income of just $3,000 each month after taxes. That's only $36,000 a year. Why is there such a drain on our nest egg? It's because of the effects of taxes, inflation, and market volatility. These factors can short out our money supply or run our battery dry prematurely. A better approach would be to have a financial generator that never runs out; one that can provide twice or even ten times the juice of that battery. What if, instead, we had a $1.25 million nest egg that was generating $100,000 to $125,000 annually of tax-free income? What if this generator was linked to inflation in such a way that inflation actually helped rather than hindered us? How nice would it be if that generator protected us from losing principal when the economy or the markets were down? That's the kind of nest egg that will not run out of power. Instead, it will generate tax-free income for life and continue on for generations. Instead of outliving our wealth, we can pass it on to our spouse and our children and grandchildren in perpetuity. Rather than being taxed on every dollar that's being accessed like an IRA is, this income remains tax-free. That's the difference between a financial battery and a financial generator. It's the difference between creating long-lasting wealth and a limited supply that can be quickly depleted. There's a reason the right principles and strategies lead to what's called generational wealth. Start by visiting with a wealth architect today.

Two Highly Helpful Acronyms Time is not on your side when it comes to the obstacles that stand between you and the brighter future you're working to achieve. Of course, in this case, TIME is an acronym for the combined threat of Taxes, Inflation, Market volatility and Economic uncertainty. Each obstacle carries its own type of negative impact. Thankfully, all of them can be identified and even countered by learning the principles that protect against them. Those principles include liquidity, safety, rate of return, and tax benefits. They can best be remembered by use of another acronym--LASER. LASER stands for Liquid Assets Safely Earning a predictable Rate of return. The tax benefits part of our solution cannot be overstated. Most people will find themselves in anything but a lower tax bracket when they reach retirement. This means that they could stand to lose up to 50% of their retirement nest egg in the form of unnecessary taxes. It's absolutely crucial to understand the difference between accumulating your nest egg in taxed-as-earned, tax-deferred, and tax-free dollars. This is where some fearless self-examination must take place. Doug's friend and success coach Dan Sullivan teaches his students that all progress starts with telling the truth. With this in mind, Doug developed an Abundant Living scorecard that helps evaluate as honestly as possible where we actually stand in regards to our retirement savings. Where Do You Stand? We begin by scoring ourselves on a scale of 1 to 12, with a 1 being poor and a 12 being the best. Your score may be somewhat good at 3,4, or 5, or it might be better at 7,8, or 9. If your money is in taxed-as-earned CDs, savings accounts, credit union accounts, mutual funds that are not IRAs or 401(k)s, then your after-tax dollars are still being taxed. That means that you’re being taxed again on interest, dividends or any other gains you realize. It's the worst possible way to save for retirement. Score yourself as a 1, 2 or 3 out of a possible 12 if this is how you’re saving. If your savings are taxed as earned, you’re in a poor situation for your future retirement from a tax standpoint. When you save in a traditional IRA or 401(k), your money accumulates tax-deferred. People who do this are doing this are putting pre-tax dollars into a tax-deferred account in the hopes they’ll be in a lower tax bracket at retirement. But being in a lower tax bracket at retirement hasn’t been a guaranteed thing for nearly 25 years. If you’re saving in this tax-deferred category, score yourself a 4, 5, or 6 on a scale of 1-12. You’re better off than the taxed-as-earned category but still barely halfway to where you could be. If you are saving for retirement in a Roth IRA, you’re moving in the right direction. Less than 10% of Americans utilize this method of saving. You’ll end up about 33% better off by saving in a tax-free Roth IRA than you would be in a tax-deferred account like a traditional IRA or 401(k). If this is how you’re saving the biggest portion of your nest egg, you can score yourself at an 8 or 9 which puts you solidly into the better category. The next type of savings is totally tax-free accumulation with tax-free access when you retire and a tax-free transfer at the end of your life. You can also enjoy deductions indirectly so that you’re using tax-advantaged dollars in all four phases of retirement planning. That would include the contribution phase, the accumulation phase, the distribution phase and the transfer phase. This is the best situation to be in and it can net you 50 to 100 percent more in your retirement nest egg than the other categories. Here, you’re solidly in best territory. This is where you can score a 12 out of 12. The vehicle of choice for this kind of retirement savings is maximum-funded, tax-advantaged life insurance contracts. If you can see the difference between bad, good, better and best.

Overcoming the Obstacles of TIME Many of the biggest obstacles we might encounter on our way to a brighter future can be summarized in the acronym TIME. It stands for Taxes, Inflation, Market volatility and Economic Uncertainty. They represent...

How Different Retirement Vehicles Compare Success coach Dan Sullivan teaches his students that all progress starts with telling the truth. With this in mind, Doug developed an Abundant Living scorecard that helps establish where we actually stan...

Optimizing Assets While Minimizing Taxes Some of the biggest obstacles to your brighter future can be summed up in the acronym TIME. They are Taxes, Inflation, Market volatility and Economic Uncertainty. We need to be able to protect ourselves from the negative impact of these obstacles. Many of the audience members who Doug speaks to across the country say they feel overwhelmed when they first begin determining where they are at. Success coach Dan Sullivan likes to say that all progress begins by telling the truth. With this in mind, Doug developed an Abundant Living scorecard that helps establish where we actually stand. The principles of liquidity, safety, rate of return, and tax benefits can be remembered by the acronym LASER. It stands for Liquid Assets Safely Earning a predictable Rate of return. Let's begin with the part that includes tax benefits. To be perfectly blunt, taxes are going up and you need to understand that some people stand to lose 50% or more of their retirement nest egg to unnecessary taxes. This is primarily because most people will not be in lower tax brackets when they retire. Let's begin by scoring ourselves on a scale of 1 to 12, with a 1 being poor and a 12 being the best. Your score may be somewhat good at 3,4, or 5, or it might be better at 7,8, or 9. Be as honest as possible in scoring yourself. How Retirement Savings Vehicles Differ If you have money in taxed-as-earned CDs, savings accounts, credit union accounts, mutual funds that are not IRAs or 401(k)s, your after-tax dollars are still being taxed. This means that you're getting taxed again on the interest or dividends or any other gains you realize. If your money is taxed as you earn it, that is the worst possible way to save and you wouldn't believe how many Americans have a lot of their serious money saved in this manner. You should score yourself as a 1, 2 or 3 out of a possible 12 if this is how you're saving. If your savings are taxed as earned, you're in a poor situation for your future retirement from a tax standpoint. If you're saving for the future in a traditional IRA or 401(k), your money is accumulating tax-deferred. This means that you're putting in pre-tax dollars into a tax-deferred account because you thought that you'll be in a lower tax bracket when you retire. Trouble is, that lower tax bracket at retirement hasn't been axiomatic for nearly 25 years. If you're in that category, you should score yourself a 4, 5, or 6 on a scale of 1-12. While you're in the good category, you're barely halfway to where you could be. If you are saving your nest egg in a Roth IRA, this is a step in the right direction. Only about 9% of Americans are utilizing this method of saving. You're going to be about 33% better off saving in a tax-free Roth IRA than you would be in a tax-deferred account like a traditional IRA or 401(k). If this is where you're saving the biggest part of your retirement nest egg, you can safely score yourself at an 8 or 9 which puts you solidly into the better category. The next type of savings is totally tax-free accumulation with tax-free access when you retire and a tax-free transfer at the end of your life. You can also get deductions indirectly other ways so that you're using tax-advantaged dollars in all four phases of retirement planning. This includes the contribution phase, the accumulation phase, the distribution phase and the transfer phase. This is the best situation to be in and it can net you 50 to 100 percent more in your retirement nest egg than the poor, good, and better categories. This is where you're solidly in best territory. This is where you can score a 12 out of 12. The vehicle of choice for this kind of retirement savings is maximum-funded, tax-advantaged life insurance contracts. If learning how to enjoy tax-advantaged liquid assets safely earning a predictable rate of return (LASER) is making sense to you right now,

Living on 67 Cent Dollars Over the years, Doug has taught thousands of financial professionals. Sometimes it's amazing that even those who have been tax attorneys or certified public accountants have serious gaps in their knowledge. When Doug was...

Which Would You Choose To illustrate the difference that having your financial house in order can make, here's a simple question: Would you rather have $27,000 in an account or $72,000 or $666,000 or $1 million? You have four choices before you, ...

3 Dangers That Threaten Retirement When you hear the word "retirement", what comes to your mind? For some people it can bring negative thoughts since the word "retirement" denotes being taken out of service. For others, it heralds the approaching golden years when they hope to enjoy the fruits of their labors. Three things that can threaten the peace of mind of those in their retirement years are higher taxes, rising inflation, and ongoing market volatility. These are dangers that we would be prudent to eliminate from our lives. They are the kind of things that could prevent us from really enjoying our golden years when we should be able to go and do the kinds of things that really make a difference. This could include family trips, church missions, humanitarian work, and philanthropy. When we're having real impact in the world, the last thing we want to have worry about is our money being eroded away. That's why it's so important have the proper savings vehicle where our money safely accumulates tax-free and not just tax-defered. This savings vehicle should allow you to access your money tax-free with the full blessings of provisions of the IRS code that have been in place for over 100 years. Finally, when we've completed our life's journey, the proper savings vehicle should allow our savings to blossom and transfer tax-free to our loved ones. The Power of Tax-free Savings There is only one vehicle in the Internal Revenue Code that accomplishes this. Under Section 72-e, your money accumulates tax-free under insurance contracts. Sadly, most financial advisors have no clue on how to structure an insurance contract to give you an internal, cash on cash, rate of return average 8,9, or even 10 percent. This is not just wishful thinking. These are actual rates of return that Doug has been able to enjoy over the last 7 years or so using a strategy known as indexing. E.F. Hutton is the firm that was the brainchild behind the emergence of this concept back in 1980. From 1980 to 1997, Doug averaged an 8.2% rate of return. That jumped up to over 10% once indexing and rebalancing was introduced. Remember, if you earn 7.2%, your money will double every 10 years. If you earn 10%, your money will double roughly every 7 years. Now consider the power of your money doubling tax-free. If you were able to save up a million dollar nest egg, that million dollars should be able to generate between $70,000 to $100,000 per year of tax-free retirement cash flow without depleting principal. Here's another way to look at it. In order to net $100,000 of tax-free income, you'd need $150,000 of withdrawals from a traditional IRA or 401(k). That's because state and federal taxes will gobble up nearly a third of what you withdraw. This means that people who have used a tax-deferred vehicle to save for their retirement are facing the uncomfortable thought of outliving their retirement nest eggs. They put their retirement money into tax-deferred IRAs and 401(k)s fully believing that they'll be in a lower tax bracket at retirement. This has not been axiomatic for some time now. If anything, people who have taken this approach are finding themselves paying the highest tax rates yet when they go to access their retirement money. The better retirement vehicle allows you to accumulate your money tax-free, to access it tax-free and without any strings attached, and will transfer tax-free to your loved ones at the end of your life. Learning how to implement these proven strategies isn't magic and it isn't a tax loophole. It does require a willingness to break from the crowd and learn what you don't yet know. Start by visiting with a wealth architect today.

Never Underestimate the Power of Starting Small When truly abundant living is our goal, it's easy sometimes to forget just how important the relatively small details can be. While keeping sight of the big picture, we shouldn't underestimate the difference that little things can make. For instance, how powerful would it be if a young person approached the way they think about money with the clear understanding that a dollar doubling every period for 20 periods will grow to $1,048,000. All that's required is the miracle of compound interest and a degree of patience. And what if that same young person realized that there's a world of difference in how that dollar grows if it is taxed as it's earned. They'd understand that a person who's paying 25% on that dollar each time it doubles will only end up with $72,000 instead of a million dollars. In addition, if those dollars are taxed in a 33% bracket, where the majority of people who pay state and federal income tax currently find themselves, they'll end up with just $27,000. Tax-deferred accounts just move that taxation to the back end where it can consume an impressive chunk of your money's growth. Individuals preparing for an abundant future can enjoy an undeniable advantage if they simply understand the power of: compound interest tax-free accumulation safe positive leverage; meaning the ability to control assets with very little of your money tied up or at risk in the asset Getting the seemingly small details right can make an exponential difference in the kind of future we'll eventually reach. It can mean becoming a multimillionaire or being the person who struggles to make it just a year into his or her retirement. Building a strong bridge between generations or people on begins with the equivalent of a small string and persistence as our ties become stronger. Here's a story to illustrate. It Started With A Boy and His Kite When Homan J. Walsh passed away in 1899, the newspapers in Lincoln, Nebraska wrote about how he had been a resident of the city, a former city council member, and a local business leader. But he was also recognized for a key role he played as a youngster in the building of first suspension bridge over the Niagara River in New York State. In the fall of 1847, a civil engineer named Charles Ellet Jr. from Philadelphia was commissioned to build a suspension bridge over the Niagara Gorge. This new bridge would allow a road to be built that would connect the United States and Canada. Ellet's biggest challenge was that, up until that point, no one had built a suspension bridge over a thousand feet in length. The raging rapids in the gorge below presented a gigantic obstacle in getting the first line or wire across the gorge so that subsequent, larger wires could follow. Someone surmised that a kite could safely carry the initial line across the gorge and a prize was put up for the first boy to successfully fly his kite and the line across to the opposite bank. In January of 1848, Homan J. Walsh joined the other youngsters in the kite-flying contest. Unlike the others, Walsh first took a ferry to the Canadian side of the river so he could take advantage of the prevailing winter winds. Late at night, when there was a lull in the wind, he successfully flew his kite high across the river to the American side. But the line that was attached to his kite string broke. Now Walsh found himself stranded in Canada for the next 8 or 9 days as river ice prevented the ferry from taking him back to the U.S. side. Finally, he returned to the American side and retrieved his kite. A few days later, Walsh went back to Canada and this time he successfully flew his kite to the U.S. side with the line attached. The line was tied to a cord that was pulled across from the American side and this time the line held. The new bridge could now be built. The suspension bridge was completed on July 26, 1848.

The Second Most Famous Kite Story In American History Few Americans are familiar with Homan J. Walsh. But he and his kite are a part of American history second only to Ben Franklin and his famous electrical experiment. When he was just a boy, Wal...

American Voters May Be Catching On Last November's election may not have made huge waves, but it's clear that in many ways voters are not happy with Congress and their elected leaders for a perceived lack of progress. A large number of bills that...

A Kite That Helped Build a Bridge Not everyone knows who Homan J. Walsh was but we can all learn a lot from him. When Walsh died in March of 1899, local newspapers in Lincoln, Nebraska noted that he had been a resident of the city, a former city ...