How do i industry sign banking alabama pdf free
well good morning this is a particular session is being recorded and will be broadcast on money show comm and will be available on their website as well as our website in a month so I'm excited to see you here I'm excited to see that there are a few people at the San Francisco money show that don't like to pay taxes that's why you're here because we're going to talk about tax free it's it's a different sort of world that you're going to be entering into it is the world of tax free not tax deferred like the IRAs or the 401ks or the annuities this is a tax free world that we're going to be talking about and I've entitled my topic and my book which by the way all of you in attendance today will be able to receive a copy of this book it's 24.95 on Amazon but you can get it from me here today for $10 we will also be myself and Rick turkey who's in the back be speaking a little bit later today or gonna be doing a symposium on estate planning and asset protection tomorrow at 9 o'clock in the morning Rick and I will be available for interviews the rest of the day and sweet Pacific Jay so somewhere about four floors up I believe is what it is so let's talk about the family bank strategy and what it is how many of you have had the opportunity to see at slot present on safety PBS on public broadcast he is recognized all over the country as the nation's leading expert in IRAs and in 2014 he was he presented a program that I happened to tune into and found it very interesting now first of all Edie's very animated a lot more than I am those of you have seen him know what I'm talking about he it's pretty excited and he made this bold statement he said if I could show you a way your family could be guaranteed to inherit your estate value today so the value of what it is today and hey they get inherited tax-free regardless of what happens to those investments due to market conditions in the future regardless of interest rates regardless of how much you spend would you be interested so if I could show you a way that you could give what you have to your family today without any loss without any shrinkage of it would you be interested and then of course in his exuberant way he goes who wouldn't want that right that's it slot well I've added a little bit to his quote if I could show you how to grow your safe money free from taxes without any market risk earning on average five to eight percent taking when you want tax-free distributions would you be interested let me add at slots exuberance who wouldn't want that well I got to thinking about this after it's broadcast and I got to thinking about well what if I could create my own family bank I could just you know just think of something Korea be creative be a be a creative genius and create my own family Bank what qualities would I want in my family Bank so I just I came up with seventeen qualities the first quality of course that I would want to my family bank would be tax deferred growth because you know as you're paying taxes along the way as you're growing an asset it's being whittled away and less productive and so you're not able to compound as much as you're paying taxes a long way so I want it to be tax deferred as it's growing but then when I take the money out I want it to be tax free so I've got any gain I want to be able to access a tax-free I want it also to be self fulfilling so let's just say in my family bank I want to create a account of two million dollars well what if I died the day after I start my family bank I wouldn't have had enough time to put in the two million dollars so I'd like my bank to be self fulfilling so that the two million dollars would be there so that I could pass that two million dollars to my family even though I didn't have enough time to create the two million I want to be able to do that and if I'm under 65 I want to fund it I want it to be funded for on my behalf of I became disabled the fifth quality of my family bank would be steady consistent up side only growth somewhere between five and eight percent I don't want to hit swing for the fences no home runs just single after single I want some consistency each and every year I want to make sure that any gains that I have in my family bank once they are attained I want them to be locked in and never lost due to market downturns also in my family bank I want to be able to access my money to borrow the money personally without any interest wouldn't that be nice and without any payment schedule and I would also like paying a loan back that I take out of my family bake optional and I don't want it to affect my credit score I want to be able to take out loans whenever I want - without any qualification or time delays with no one telling me no you can't have it so if I want to buy a car i buy a car for one of I avoid I bought a boat make a down payment on a home acquire real estate pay for education for my children and my grandchildren to cover the medical and emergency expenses and even generate sizable retirement income for me and my family I also want to be able to lend money to my family members at the preferred rates that I designate now I could even lend money to my family members to my kids and my grandkids and my nieces and nephews without any interest if I decide to but if I want to have them pay some interest I'm the one that makes the determination of what it is not the bank not not the other institution I also want to be able to forgive those loans if I if I decide to I want my bank to be customer friendly with no debt collectors ever calling I want to be able to transfer my bank to my spouse to my children my grandchildren are my favorite charity without taxation on the gains that I've had in my family bank and I want to do this without any expense of probate I wanted to be creditor proof so that if someone comes and sues me they can't get at it this isn't my little bank my little family bank I don't want anybody any creditors or predators to grab it now IRAs required distributions correct at seventy and a half well I want my bank distribution to be determined by me not by the government I want to be able to take it out when I want not somebody telling me what I have to take it out and I also don't want them to tell me how much to take out because of the required distribution they tell you how much to take out correct well I also want it to be back by some of the strongest financial institutions in the world companies that are over a hundred years old I wanted to carry my personal family name so I wanted to be called the Philips family bank and most importantly I want my bank to be safe from scammers like Bernie Madoff and other pollens and criminals so those are my 17 qualities I'm sure I could have figured out a few more but 17 I was exhausted after 17 now my question is if you could have a family bank like that would you want that or let me ask another way who wouldn't want that who wouldn't want a family bank like that well the secret is out every American all Americans here especially adult Americans that are have some kind of means of support can create their own family bank so the question that you're asking yourself is well how in the world is it possible how can I have all 17 of those qualities that David just introduced me to well it all started about 250 years ago and for the longest time there were no regulations in reference to the family bank but in 1913 something happened we Congress passed the sixteenth Amendment does anybody remember what that amendment is that's the income tax amendment interesting enough a lot of things were mentioned as being taxed banks interest interest from banks from investment accounts capital gains tax a lot of those taxes were mentioned but there was no tax mentioned about the family bank in fact the family bank was left off the list then a couple sections of the Internal Revenue Code came out sections 101 and Section 7702 of the code and guess what they actually stated at the family bank would be tax-free it's actually part of the code well this went on for a while and finally in 1984 Congress took another look and they recodified the family bank and then in 2006 with the Pension Protection Act they added a couple of additional benefits to the family bank that were not on there before one of them was that you could actually receive long term care benefits from the family bank and have them come to you personally tax-free that was in 2006 so what is the family bank well folks it's beautiful simple life insurance that's what the family bank is you may have heard it has been called the infinite banking or bank on yourself the concepts is two hundred fifty years old and it's tried and true and there are ways in which you can create this family bank that are intelligent that makes a lot of sense it's permanent life insurance not term insurance so before I see a mass exit from from my seminar today bear with me all 17 qualities that I told you about are in life insurance all 17 and we call it the family bank the stars of a line the time has come so much so that Ed slot has been quoted as stating in this PBS broadcast the tax exemption for life insurance is the single biggest benefit of the tax code edie slot says this and what said slot specialty IRAs he doesn't get any Commission's he's not an agent he makes a bold statement like that and then he says life insurance is the only way to legally print money well I wrote the family strategy book to basically take the lid off of this there's a lot of Cystic stuff going out there right now and I really wanted to tell the complete story the complete truth and so I wrote this book to let you know to let consumers know to let Americans know the truth about family bank and how it really works but it all centered around one basic characteristic of the family bank and that is the preferential tax treatment so as I said at the beginning of this seminar today you are fortunate to be here because today you're going to learn how to accumulate tax-free wealth not tax deferred wealth tax-free wealth in preferential tax world well this is called the might I call this my family bank schematic this is the way it kind of boils down so you can understand how it actually works so let's say I have a gentleman come to my office and says David I'm 65 years old and I want a million dollars worth of life insurance I want this life insurance to go to my grandkids or I wanted to go for college education for my grandkids or I'd like this to use this million dollars to pay estate taxes or the taxes that are going to be incurred on my IRA because you guys all know that IRA money is deferred tax has been deferred from the taxes and someday somebody has to pay taxes when you take the IRA out so if you don't pay the taxes and pass it to your heirs which 82% of all IRA money has passed to heirs somebody is going to have to pay taxes someday so maybe you're going to use this million dollars to pay the taxes so you say to me David show me my options well the first option is to buy term insurance term insurance is logical as a logical play but what happens with term insurance what happens with Turman eventually at what it ends the term period ends and if you haven't died within the term period thank you very much we appreciate you paying this and get it get the heck out of here okay term insurance is a temporary solution so for a twenty year level term policy for a 65 year old for a million dollars in good health its eleven thousand dollars a year so you get that well there's another product that I use often in a state planning it's called no lapse guarantee it's just a basically I like to reference it as permanent term insurance there's an it's very one-dimensional it has a life insurance benefit but it doesn't have a term period so it always is going to pay a life insurance benefit as long as you're paying the premium and what's the premium for that benefit twenty thousand dollars so for a million dollars I put in twenty thousand that means that if I pay my premium of twenty thousand and I die the next day how much does my family get and is it taxable no because section 101 says it's tax-free so get this in your line it's tax-free and you only put in twenty thousand dollars but that's a very one dimensional type policy where you only have a life insurance benefit well you could actually now kind of create a family bank by doing what's called a target premium funded plan and this is a little bit more Emporium twenty seven thousand dollars in premium of which of that twenty seven nine of it is going into I'm sorry seven of it is going into the cost of the insurance for further million dollar policy and the rest of it is going into a savings account and what happens in the savings account the interest in the savings account earns the money in the savings account earns interest and based on Section 7702 of the code that interest accumulates tax-free not deferred but tax-free so it come it's accumulating so we have the live insurance benefit we have the cash accumulation and everything is compounding tax-free well you can also do the whole life option on this and it's a little bit more in premium thirty thirty one thousand dollars well what if though I said this is such a great idea I really like the idea of accumulating wealth tax-free and I want to put in a zillion dollars and I'm 65 and I have a million dollar policy you can't do that the IRS says in 1984 there's some regulations there's a limit and I've learned that any time the IRS limits something it's usually a good deal okay because they don't want you to to take advantage of them so you could put into it a max funded eighty nine thousand dollars so my 65 year old instead of just putting in the twenty thousand he could put in eighty nine thousand well why would I do that why would I put in more than I have to because the interest earns and accumulates compounding tax-free that's why you do it what can you do with the money well you can do virtually anything with the money you can use it for your education for emergencies for business opportunities for a down payment on a home to give to your grandkids all of this money can go it can be a family bank so if you want to buy a car you take the money out of the bank and do you pay taxes on that when you take it out no because you take the money out through a loan process and it's a cost-free loan process that you take it out so you do not only do you not pay any expense to take the loan but you also don't have to repay it why not because the loan comes from the life insurance benefit so let me give you an example let's say I have a million dollar policy and I take out a hundred thousand dollar loan for yacht and I died the next day how much does my family get they get the yacht because it was I bought it with cash and they get nine hundred thousand dollars of life insurance because I have a loan against my policy well then and I and we can individually talk to each of you about your personal situation and how the family bank can work for you let me just kind of give you a couple of examples here so let's just look at the 65 year old again in here if we did if you said to me I want a million dollars but I just want to do 10 deposits I don't want to continue to make deposits but I just want 10 deposits so I'm going to put into it 40,000 on the target I'm going to put into it $40,000 and I'm immediately insured for a million dollars but look at my cash value at the end of ten years it's three hundred and seventy three thousand now I was insured the entire time for a million dollars but in ten years I've got three hundred and seventy three thousand dollars tax-free cash built up in 20 years is five hundred and thirty one but if I decided to stuff my policy or use this maximum put the maximum amount in I could put into it eighty nine thousand s's figure that we had before but look at the cash value difference it's actually three times the target but the premium is just barely double isn't that interesting the deposit is double but my cash is three times now when the life insurance and the cash value accounts become close to each other there's a rule in the policies that that requires that the policy's increase the face amount accordingly so that we don't create the taxable eve
t we want to make sure that that is always in place and the programs that we work with do them so this is called a target this is called stuffing this is for a mail I've actually found that for those individuals that are really want to use this vehicle as a tax-free accumulation account and tax-free income account that if they are married it's actually better to do a joint policy husband and wife together why would that be because the life insurance benefit on a joint policy doesn't pay until the surviving spouse passes away so not on the first to go it's on the surviving so the cost of insurance is a lot lower so if the cost of insurance is lower and you're putting in the same amount of money $40,000 look at the cash accumulation it's significantly more in fact I put in 43,000 over 10 years it's I put in four hundred and thirty thousand my cash is four hundred ninety three thousand but look at the life insurance benefit it starts out at two million dollars so it's two million the set of a million two million dollars to my family tax-free but look at the stuffing I put in one hundred and thirty one thousand and my cash value is a million six I mean what can you do with a million dollars of tax-free money it's pretty impressive why would anybody do a Roth no one would do it no one if they understood this would do a Roth ever do a rot why because a Roth is worth what a Roth is worth period here you put in forty three thousand it's worth two million dollars day one tax-free no one would do a Roth no one and Roth has risk this has singles five to eight percent boom every time at bat boom every time a bet no home runs no fences but singles five to eight percent okay well let's talk now about the reality where do I come up with money then to fund my family bank sounds like a great idea where do I come up with money I want to fund this I like this this is great I want tax-free where do I come up with the money well first of all look at your idle money the money that you might have in a CD or in an annuity or money that you might have in a money market account or even a brokerage account that has a lot of risk because what this does is this is going to take the risk off the table there's no more risk we're not going to take the risk this is a risk free in situation I'm not going to swing for the fences I won't allow you to do that it says this is a steady single after single another place that we find money is in your IRA we talked about the Roth conversion but did money sitting in the IRA wouldn't it be nice if you could take that IRA and do a Roth like conversion but instead of you having to pay the taxes on the conversion the year after you take the money out on April 15th let's let somebody else pay the tax liability doesn't that make sense wouldn't that feel better so I get to create my family bank I get to create my family bank and have all the virtues of the 17 qualities that I want but I get to take it from my IRA and have somebody else pay the tax liability with no out-of-pocket cost to me we call this concept the IRA reboot with the family bank strategy and in fact it's the tax-free ace that you have up your sleeve how does it work well let's say I have a hundred million dollars in my IRA and I decide I'm going to do the IRA reboot and I'm going to do a repositioning of it over a three to five year period of time so I'm not going to take it all out immediately I can take it's still going to be in my IRA but I'm going to reposition it over a period of years why would I do that well because I don't want to create a taxable immediately so what I do is I I secure a very special kind of family bank strategy it's a unique one so it's not you can't just go on pick it off the street it's not out there but there's a few folks and like myself that know where this program is and you take your tax payments from the cash value from the policy so what you do is let's just assume your tax payment is a hundred thousand dollars of that 333 that you took out in year one when would the tax be due immediately now the year following the the year following the extraction of the three hundred thirty three thousand from your IRA well the special kind of policy has sufficient cash value in the policy at the end of the first year that you can borrow from the cash value account with life insurance to borrow money they credit they charge you for to borrow but they credit you for so it's called a wash loan and so you don't pay any cost to that and because you take it out as a loan using your cash value as collateral for the loan and you take the loan from the insurance company is it reportable on a 1099 no it's a loan you're borrowing money from the insurance company using your money as collateral it is a non 1099 event and therefore you use that cash value to pay the taxes in year two year three and year four and therefore now you have a fully tax-free family bank strategy here the advantages you get to reduce the effective tax consequence while you're doing so you there's it's less tax on your Social Security you don't have to pay the 3.5 tax it's tax-free wealth transfer because I'm taking this IRA that I normally would have passed to my beneficiaries and I'm going to create a tax-free transfer this is going to secure a large life insurance policy for my family that's going to be tax-free which increases my estate and I also then have can create tax-free income for the rest of my life you need to see this this IRA reboot is an amazing strategy and what I suggest to each of you is on your handout put down at you on the evaluation form that each of you should have there's a evaluation form if you'll turn that evaluation form in you not only get a copy of my book the family bank strategy for ten dollars you'll also be able to get some specific information about the IRA reboot and how it would work for you if this is something that you have if you have money in your IRA and we will prepare one for you okay well let's talk about required distributions from IRAs I keep picking on IRAs as a source of funds but that's where a lot of the money is so what happens is seventy and a half what happens we have to take money out of our IR a again that's not one of the qualities of the family bank because the family bank you don't ever have to take money out of it it's up to you if you want to but with an IRA you have to take money out and in fact in when you're 70 and a half the factor is 27.4 which is roughly four percent that's how much you have to take out well what if I don't want to take out my IRR MD what if I don't need the money to live on what it was just a pain what if it's a burden and that's you know I mean that's the way it is for a lot of folks so the first option that you have is to spend it but if you spend it it's gone forever the next is to invest it but it's only worth what it is worth when you invest it and it can be a risk why don't you give it to a charity we can give up to $100,000 to a charity why don't you just give it to a charity because you disinherited your family forever but why don't we just give it to my kids outright I get $14,000 a year I can give to my kids Mike's and 20 and my wife 14 thousand eight thousand dollars for each kid why don't I just give it to my kids straight up or my grandkids a gifted dollar is only worth a dollar it can't be controlled and if it is spent by your kids or grandkids it has no earning power you basically use the seed you had the kids eat the seed instead of letting the seed grow well I recommend that you do what's called the IRA required minimum distribution leverage strategy and I have a book a booklet on this if you'd like to get this I actually have some of them here and you can pick this up today from me by turning in your evaluation form so in this case I have George and Sarah and there's both 71 years old and this is their first RMD this is 27,000 is their net RMD at the end of the year and they take that RMD and they have a couple of options they could put it in a Roth but what's what's going to be worth at the end of the first year twenty nine thousand right because I earned a little bit of interest in it they could do the wealth creation plan which is that permanent term policy that I talked about it creates a hat a 1.5 million or they could do the family bank strategy so they could take this $27,000 where is it right there $27,000 and put it in and immediately they be insured for one point four million dollars immediately so if they passed away the next day the kids would get one point four million dollars tax-free how much do they put in 27,000 so and you can see in ten years your Roth be worth 350 your Roth will be earning six point-9 1% with a 1 percent investment fee so you'd have to earn that every year you couldn't ever have any bad years you could never lose any money so it'd have to probably be in an indexed annuity or something like that because you could never lose any money here but it would be worth three hundred fifty three thousand if you earned steady every year and twenty years had been worth nine hundred ninety eight thousand dollars but my but my family bank strategy was always worth more than the than the straight-up Roth would be okay so what is that well in ten years the return on investment is eleven point eight six percent I know that you could find that anywhere consistently year after year without any risk I just don't think it exists okay and yet you can't find that in the family bank strategy so with the RMD leverage strategy you supercharge your gift you guarantee your future gift to your family it's complete completely controlled by you and it's a totally tax-free inheritance but let's talk about the accumulation account because they could say well sure the life insurance is always going to win because it has a big huge life insurance benefit what about the investment account well again if I earned 6.92 in my Roth with a one percent investment fee so I would end up nine 5.92 and I compared that to earning 5.92 in my family bank strategy which by the way I can show you the probability of doing that is a hundred percent probable you would at the end of ten years have three hundred and one thousand dollars in the family bank so your Roth would actually be better but what happens if you died how much is a Roth worth a Roth is only worth what a Roth is worth this is worth one point four million dollars tax-free hello in 20 years of course the rock now is compounded to a million dollars family bank is still behind but it still is worth one point four million dollars so what is which is what is worth more and I have the ability the same in both accounts to access the money tax-free a Roth is monies accessible tax-free but so is the family bank and there's no risk in the family bank and there this is laden with risk to get nine hundred and ninety eight thousand dollars at seven percent a year you've got to put your neck on the line you got to take some risk okay so in summary with the RMD leverage strategy again I have the special report that you can pick up for free today by filling out your evaluation form just tell me how I did here today the Rd leverage strategy creates an immediate and perpetual life insurance benefit that guarantees no matter how the markets perform no matter what happens to the economy no matter how much you spend of your IRA money your family will receive a totally tax-free inheritance well at slot again the Guru of IRAs what does he say about this exact strategy that I just said what do you think he says by leveraging your taxable retirement assets into a tax-free life insurance policy you have the ability to turn a highly taxed asset like your retirement account into many times its current value drumroll totally tax-free and then he says in his excitable way do it now stuff as much money as you can into permanent life insurance to create a lifetime protection savings account I call it the family bank strategy now let's the nuts and bolts of it what am I really talking about here sure it's nice to be selfish to be creating a tax-free world for myself a tax-free account that I can access to buy the Mercedes to buy the car that the boat to use as a down payment on a home to give to my grandkids tax-free to for in for college education I don't need to do any 529 plans if I understand the family bank correctly because I would do I would fund their education through the family bank but what am I really talking about here I'm talking about the next generations if you want to create a future of powerful productive posterity you do it through the family bank because you control it and you don't have to pay taxes along the way that's what it's all about now these are four of my beautiful grandchildren all sisters they actually have another one that was added since then she's just as cute as these it's a girl but the good news is and that this is not bad news this is good news believe me but good news is my youngest daughter Kelsey is going to have a baby probably any moment now so she is nine plus you her due date was yesterday so and I'm here in San Francisco and well anyway I enjoyed speaking today and sharing this idea we do fill out the evaluation form turn it in to myself or to Rick in the back Rick state would you stand up Rick you speaking today at what time 11:45 11:45 not in this room in another room and Rick will be talking about some estate planning strategies and then tomorrow Rick and I will be doing a symposium as you can see in the handout there and you can hand in your evaluation Steve well Stan Steve thank you so much for helping today Steve's a client of mine and he said I'll help we had we had middle-eastern food last night and I'm still alive and Dan in the forum - Steve - Steve you don't have any of these books though so if you want if you want one of the IRA strategy book come up and see me and then if you want the family bank book it's ten dollars and you can either pick it up here up at the Pacific Jay suite Rick and I will be up there I'll actually I'll be going up there right after this for a while and then we'll be back for Rick's talk so thank you so very much we'll see you at Pacific Jay if you want to talk about your specific situations Pacific Jay suite and we're going to I'll be up there the rest of the day after there right now and then Rick will be there after his talk so thank you very much
