What Are Tax-Free Investment Options? - YouTube

Welcome back. In this video, we're going to talk about what are tax free

investment options. This is important because when you can accumulate your

hard-earned money on a tax-favored basis, it will end up growing to more money. But

if it's tax-free when you take it out, you'll have higher net spendable

retirement income. So, we have to overcome some obstacles of the way people are

always thinking. The way they've always been taught is what they have been

thinking. And so, in this episode, I'm going to empower you to transform your

thinking, your money, the way you manage it and begin to convert to tax-free. And

sometimes that requires what we call a strategic rollout. If you stay with me to

the end, I'm going to teach you how to accumulate access and transfer your

money totally tax-free.

So, the most important point is to understand the power behind choosing

tax-free places to accumulate your money. Unfortunately a lot of people think tax

advantage savings is just a tax deferred IRA or 401k.

So, to understand what are the best options for tax-free investing. we need

to talk about why people get into the mentality that a tax deferred investment

like an IRA or 401k is about the only choice that we have. Actually that's not

the best way to save money. I have a little ditty that goes good better best.

Never let it rest how good gets better and better gets best. You know, I raised

in 401ks may be a good way to go. But I've always sort of said, "They're a far

cry from the best way to go." A Roth IRA or 401k is a step in the right direction.

It's a better way to go but do you know that I've never owned an IRA or 401k.

Never will. I've never owned a Roth IRA or 401k. Never will. My favorite vehicle

is totally tax free. And in other episode you can learn about what we call a rich

man's Roth and my favorite vehicle that is totally tax free. But we have

different choices. So, I teach this continuing education. It's advanced

continuing education to CPAs and tax attorneys. And oftentimes I will start out

with this riddle. You ready? See if you can figure this out. One day,

there were 3 fishermen that went out for a great day of fishing. And at the

end of the day, they decided to check into this little quaint Mountain Lodge.

And the clerk said, "Oh, we've got a room towards the back that has three beds in

it. It's 30 bucks. Well, that's easy. 3 men, $30. Each of the men

shells out $10. So far, so good. Well, they're getting settled back in

their room. And clerk is entering in the

books. And she goes, "Oh! We've been discounting that room during the remodel.

The installations out of the wall or whatever. They can hear the laundromat."

We've only been charging $25. So, she took five $1 bills out of the cash

register and she gave them to the bellboy. And said, "Would you go refund

these $5 to those three men?" So, the bellboy is walking back and he's

thinking, "Hmmm. How are 3 men going to divide up five $1 bills?" And he's not

very honest. So, he pockets 2 of the dollars. And he goes back and refunds a

dollar to each of the three men. So, let's do accounting. 3 men originally paid

10, right? They each got a dollar back. So they paid a net of 9. 3 men times

$9 equals $27. Plus the bellboy kept equals

$29. Where's the other dollar? 3 men originally paid 10.

They each got a dollar back. They paid a net of 9. 3 men times $9

equals 27. You add the 2, the bellboy kept equals

29. Where's the other dollar? Now, don't feel bad if I have you stumped.

Because this stumps CPAs. Okay. And they work with numbers all day long. No wonder

the general public sometimes gets confused. Do you know what I'm doing? See,

I'm tricking you. What I'm doing is I'm saying 3 men times 9 equals

27. But if I'm accounting for $30, see CPA is the first

thing they learn in accounting 101 is what are you accounting for. And number

2, are you adding or subtracting? Is it a debit or a credit? So, I'm adding the

2 the bell boy took. I should be subtracting that 2. 3

man times nine dollars there's 27 minus the 2, the bellboy kept equals the 25 which

is the price of the room. But if you're accounting for the $30, 3

men times 9 equals 27 plus the 3 they got back equals 30.

Now, if I can stump CPAs with that one because they'll pull out their slide

rule or their abacus try to figure this out some of them have calculators. And if

I can stump a CPA with that, no wonder people get duped into thinking. Hmm... Why

is it we add up what an IRA, 401K grows too. And we think that we should

choose investments that grow to the most. No. You should choose investments that

generate the most at the time in life you're going to need the money the most

after subtracting the negative impact of taxes and inflation. And I cover those on

how to eliminate those dangers in other episodes. So, what are the action steps

that you can take? Generally, there are 3 different types of investments

that people are aware of that have tax advantages. The first would be the tax

deferred IRA or 401k. As I explained in other episodes, you're getting a tax

break on a traditional IRA or 401k on the seed money, so to speak. And then

you're agreeing to pay tax when you harvest that. I use the farmer and the

seed analogy. You know, I'd rather just pay tax on the seed myself and enjoy the

harvest without tax in the fall of life, so to speak. And so, that is only deferred.

Then people end up paying taxes through their nose in retirement. Another tax

advantage vehicle would be municipal bonds. Now, municipal bonds are okay

except some municipalities are in trouble. So, I don't trust that my money

is all that safe in some municipal bonds depending upon the government or how

it's run. I've generally earned in my favorite vehicle which I call the laser

fund. 2 to 3 percent higher rates of return than most municipal bonds. Some

people say what about a Roth? Now, in other episodes, I talk about the 2

benefits of a Roth. You take after-tax money. And you accumulate it tax-free and

you can take it out tax-free. What I like is sometimes referred to by CPAs and tax

attorneys as a rich man's Roth. And in another episode, you'll be able to learn

about that. But see, I like to accumulate my money tax-free. Be able to access it

tax-free and when I die, I want it to increase in value double, triple maybe.

And transfer tax-free. In my other educational materials and my books, I

disclose that in the Internal Revenue Code for over a hundred years now, there

is only one vehicle that I have found that allows you to accumulate your money

tax-free. And then be able to access that money tax-free. And then when you die, it

blossoms in value and transfers tax-free. And I want you to learn about how to be

able to do that because you will actually achieve financial independence

much quicker and not worry about running out of money. So, why is this important?

Because I've noticed that sometimes people when they retire... Let's say they

need $100,000 to buy gas and groceries, prescriptions, golf

green fees and retirement in a year. So, they go to their IRA or 401k and they

withdraw 100,000. And then all of a sudden they're surprised because

they have to pay federal tax. Maybe of 25% on another 5, 6 or 7 percent

in state tax. So let's say a third. Just to round it. So, they only have 67,000 after

paying tax on the 100,000 withdrawal. They go, "Well, I needed

100,000." So, they go back and they withdraw another 33

thousand dollars. And they say, "Okay. Well, wait a minute. Now, we have to pay tax of

a third on that 33,000." 11. So, they go back because they're

11,000 short still. They go back and they get the 11,000. They're

coming back and they have to pay tax of a third of that. They're going back and

forth back and forth withdrawing money out of their IRA or 401k. And they begin

to realize, "Wait a minute. Every time I have money coming out, a third of it goes

out the window in taxes. How much do I need to withdraw in the first place so I

can net 100,000?" in a 33% tax bracket, you have to

pull out 50% more. You have to pull out 150,000.

Pay tax of 1/3. 50,000 to net 100,000. Do you know on

a million dollar nest egg? If you were earning 10% return, you'd be out

of money in 11 years. Because you have to pull out 50% more in a 33% tax

bracket to have the same net spendable income as a tax-free investment. Wouldn't

you like to be able to withdraw your 100,000 and it's tax-free? Then

you can spend 100,000. So, in my opinion, the best option is to

accumulate your money totally tax-free. Where you can

accumulate it tax-free, access your money tax-free during retirement and when you

finally pass away, whatever you leave behind blossoms increases in value and

transfers tax-free. Now, how do you do that? It's what I have called the laser

fund. And I wrote a book about it. This is my 11th book. The laser fund is really

the secret behind allowing your money to accumulate totally tax-free. But when you

take it out, it is tax-free. And if you pass away, it increases. Sometimes double

and triple and transfers income tax free. This is grandfathered under the Internal

Revenue Code. So, a lot of people like to learn more about this. And that's what

motivated me to write this book. It's actually two books in one. I would love

to have you receive a free copy. So, here's how. This first 200 pages will

empower you with charts and graphs of how to be able to convert to tax-free

income and diversify. You flip it over this direction and there's 100 pages

twelve chapters with 62 actual stories of people who have used this not just

for retirement. For college funding, for business planning and what have you. So,

if you click on the link below, you can obtain a free copy. Just pay a nominal

shipping and handling charge. Dive deep into this book and you'll see why the

laser fund is my favorite vehicle to accumulate money tax-free,

access it tax-free and whatever I leave behind, transfers income tax free.