Ron Caruthers 0:00
All right, getting that for today. So you know, we were gonna chat about safe places to put your money we kind of never quite got there last time. And for those of you that are new to the show, this is the Make More Keep More podcast. Dominic, as I was trying to say, Dominic, I was singing your praises, about how much money you've sold, and all the billions of dollars of sales that you've been responsible for. And so we talked about all things related to business and money. And the like the same goes make more keyboard. And Dominic, I think you've got the first seven episodes stripped out. And they're on their own website now, right? I do what to do with your money safely. Tell me about that.
Dominic Cummins 0:41
Yeah, so we get asked a lot. Almost every week, I think we get asked to, hey, where are these episodes? Where can we find them? So sir, currently, they've all lived on Ron and mine as well on our Instagram, but that makes him a little tougher to join. So exciting news this week, if you go to make more, keep more show.com. We have some shorter versions too. But make more keep more show.com You can actually see so far, about seven episodes, eight episodes, including the original pilot episode that nobody's ever heard. But Ron and I is, is up and running really good one that was a good one that was completely unscripted had no idea what we were doing just sitting together talking on the microphone. So those are up. Now they are, it is also published on Apple podcasts, you know, the typical iTunes stuff. And also on Spotify, that we are waiting to go live on Google. So if you're a Google podcast person, they take forever, but we are up and live on Apple and Spotify. So you can find us there. And we're gonna get these app past episodes loaded up over time. And then these newer episodes should actually go a little bit faster, because actually, I am live recording these right now. And put them in there. So we will absolutely get these up and running for you guys as we continue going on. But there's about seven of the back episodes up right now.
Ron Caruthers 2:02
Nice. We had someone asked us to introduce ourselves the inner credibility. We don't have any do we don't Yeah,
Dominic Cummins 2:08
no, absolutely not. I mean, maybe from the business perspective, but personally, absolutely zero credibility whatsoever.
Ron Caruthers 2:16
Oh, there we go, oh, that's actually a little better. There we go. I'm not totally backlit, they're nice. But hey, I had I thought I had this all worked out at my hotel. And Florence made sure my timing I'm skipping the tour that they're all going on. But you know, things happen. Basically, since this is an interview, someone did ask before we get to the actual meat of what we're going to chat about today. I'm Ron, I'm a financial and tax advisor, we do a lot of tax planning for our clients, and financial structuring, particularly, to take advantage of when the markets are not behaving the way they're supposed to. Kind of like they are right now. Dominic, I'll let you give a brief introduction, and then we're gonna get right down to the business.
Dominic Cummins 3:03
Yep, I'm Dominic real business advisors and I have been in sales for the better part of 26 years, led sales teams for about the last 20 and then started my own company about seven years ago. So I consider myself to be somewhat well versed on sales sales activities, I've sold, personally sold north of $700 million worth of products, being responsible for Team selling well over a billion dollars worth of products. So I have some experience on that also worked with a lot of entrepreneurs, coaching them and training them and leadership type stuff as well. So that's, I'm gonna make more in most cases, and Ron has to keep more but if you listen to the show long enough, we we both weigh in on all those topics.
Ron Caruthers 3:47
Yeah, we kind of step on each other all the time. So there you go. Yeah, so last time, so if you guys see me looking around, I've got like people are going by and waving at me and stuff like that. So sorry for the slight distractions here. That's the Santa Maria novella station right there. I think you guys will see the train go by the tram here in Florence going by. Oh, and by the way, I've seen this happen to other people that have followers on Instagram. If you could not go to my house while I'm out of town and try to Jack my stuff for a couple reasons. The first is, you're gonna be really disappointed. I cleaned house when I moved into this house about seven or eight years ago. It's pretty small house, don't have a lot of stuff. They're found I enjoyed spending my money, saving my money and spending it on things like travel and big steaks and stuff like that. So that'd be great. Plus, I have people staying there so you're gonna also be disappointed there. Last time Dominic. We chatted about again, the markets getting crazy and really getting your mind right around all this. And today, I thought we'd go over some specific things as far as places to keep your money We're going to talk about a little bit of weirdness, I think. But at the end of the day, I think you guys are really learned some stuff that you may not have been exposed to before. So if you don't mind, this class is going to be a little bit more of the keep more than the make more. But I'm going to be done in the Greek islands. Next week, Dominic salah, you have a little more on the throne. Well, I have people fan me and bring me drinks and stuff like that. So in fact, when we're done here, I'm going to work Hemingway style in the in the hotel bar over here and just grab a cocktail and bring out some emails and stuff like that. I like to think Hemingway would approve. Yes, but was there anything you wanted to say there? Before we get started?
Dominic Cummins 5:40
No. And I think we're gonna end up talking about the make more stuff too, because quite frankly, I thought your post was great yesterday, you can probably expound on that if anybody didn't see it, about where the the the word bankrupt came from. And I'm sure that's kind of your lead into what you're going to talk about today. And a lot of it is getting your mind right and understanding where to put your money, but also how to get more of your money, and take the opportunity to capitalize on some of the situations that are going on right now. With the markets being down. It's a good time to make money. So we'll cover all that during this episode.
Ron Caruthers 6:10
Yeah, really interesting story on that they actually told us on the bus, whoever. So first of all, let me tell you guys how I ended up here. My longest client that I have known we've known each other for 30 years, she was my ad advertising rep. For the North County Times knew the blade citizen, which was a newspaper in North County, San Diego, that merged with the North County Times and then folded into the Union Tribune. So 30 years ago, when I was brand new in business as a financial advisor. It was actually really nice compliment that she paid me because she said, she came to me for money advice. And she's like, you're not like the other guys, I cuz I'm like, I don't even know what the hell I'm doing. Like I barely know. And she's like, right, but you just seem genuine, which was a really sweet thing to say. So we've stayed in contact for years. And I've worked with her that entire time. Her first husband passed away, we handled some of the estate stuff. She remarried love the new husband, he's fantastic go home was great to both of our husbands were awesome. And she happens to be a master gardener. And so she and her husband, we've met him up in one country before and they're awesome to hang out with. So like, Hey, we're going to Italy, a friend of ours is organizing this trip. It's gonna be all master gardeners, but we can get you guys in. So if you guys know me, I don't garden, I don't do any of that, like zero. When I was 13, and we managed an apartment building, I paid the kid next door with a job, I went and got to mow the lawn because that was my responsibility. And so I could care less about any of this. But my wife's into it. My friends are cool. So we're on this trip with them. Dominic can be going around to the Pope's private gardens, and some private garden earlier that was that's in like, up against the walls of the city of Florence. Really fascinating. Even though like I said, if you'd asked me I could care less. But interestingly enough, they were talking about on the right over that the word bank robber came from bunker rota. And uncut is like a bunk hat, like, like that thing right there or a table like this. And hopefully it did make you guys seasick there. But the money changers in the bankers would work on that desk. And if they ran into money, the guild would come by and smash it. So to signify that they're out of money. And that's where our modern phrase of bank robber comes from. So did I did post about that did kind of think it was fascinating. So it's not all gardens, occasionally, we dive into the business of it. Today, because the markets are crazy, we really wanted to talk about two very specific things that we do in house for our clients, or at least talk to all our clients about, you know, again, everybody's situation is different. Your situation is different. Listen to this. So you want to get some advice on this. But here's a couple of things that you may not be familiar with. And so we'll dive into that. Before we do that. Dominic, did you have anything you wanted to jump in on? Are we good to keep going?
Dominic Cummins 9:23
Let's rock on.
Ron Caruthers 9:25
All right. I can't wait. I'm holding the phone. I can't see if there's any questions or anything. Yeah, politics over here that I'm totally backed by.
Dominic Cummins 9:32
I'll get him over to you. If we
Ron Caruthers 9:34
are you just help with that. That'd be great. So anyway, I'm sitting in a weird angle. So I apologize. Apologies for all this. But anyway, so the very first area first of all, let's, let's put down the criteria of what you look for in the perfect investment. Because what most people think about when they're chatting about investments is rate of return. rate of return is great. It's absolutely important that with any money safe or risk, and we define safe as anything that can drop in value risk is anything that can so crypto stocks, bonds, real estate, your own business, your own house, those values can fluctuate up and down. Where as safe would be anything like cash CDs. Again, anything that has a stable value, even foreign currencies, you could argue kind of don't, because they, they trade against the US markets. And right now, there's the cheapest I've ever been in Europe. But so competitive return is important. And one of the reasons that people want to be fully invested at all times, is because there hasn't people think there is no safe place to park their cash where they actually will get a rate of return. And so people think about this, and look at the point 00 1% rate of return that they're getting on a cash account, and they're like, Nope, I'm gonna buy some crypto with this. But then when the crypto markets tanking the stock markets tank or whatever markets, you're in tank, the ideas you always want to hold some back number one as an emergency fund. But number two, as an opportunity fund, a place that you can dive into a market when it's on sale. And so competitive return is really important. But so is liquidity use and control of the money, which you don't always have with your money that's in the markets. tax deferral is really important. And one of the number one reasons that people invest so heavily in their 401 K's. But it's not the only thing. Because tax free distributions are really important. Also, particularly knowing that the government is $30 trillion in debt. And knowing that tax rates inevitably, at least I believe, will go higher at some point and will likely go much higher than the current seat currently see them. And so if all your money is tied up in a 401k, you lose the liquidity use and control of the money. It's generally not safe, which is another feature that we look for, yes, you may get a competitive rate of return. But you're only postponing taxes, you're not saving them, you're just putting them off till later at an unknown rate. So those are some of the things to think about. It's not just rate of return. It's how you can access the money and when you can access the money and what the tax consequences are of accessing the money. And so those are things that you want to think about to make sure that at least some of your money is available at all times. That was a mouthful. Dominic, do you want to take a break? Or do we have any questions that we need to jump on?
Dominic Cummins 13:00
No, no questions right now. But I think one of the things that's, that's important here, because it's kind of interesting, you know, when we talk about investments, we tend to sometimes get less questions, which is, which is interesting, then when we talk about like, the hustle or the the tax stuff, and all that kind of stuff. And I think it's kind of interesting to me that all I can tell that story about the crossword once we get if we got a minute. But the the what's really interesting for me is what we talked about a lot in this show is cash is king. And really where the the the piece that's really important for everybody listening in on this show is that you have to have some cash and it's about putting something somewhere like and to your point liquidity. So I'm using cash as a term to mean anything where we can access liquidity, I understand that it's not necessarily specific, right. But I'm not talking about like the speaking of Italians, you know, burying cash in the in the coffee can in the backyard. But they're, you know, that's that's the stuff where you have to pay some attention to is when you're when you're running your business on a day to day perspective, you actually put out a post, I don't know if it was the children who put out the posts for you or you put it out or your you know, your team who did it or who happens to be my team as well put out the post, but you said something were like people usually pay I don't remember how you phrased it, but it was like, you know, pay the employees pay the government pay yourself in that order or something like that it was something along those lines, and we usually end up paying ourselves last. And I think that that's one of those things where we have that opportunity to focus in on putting some cash flow to the side and having these types of the liquidity, this type of liquidity available. So this is a really important Perspective Perspective. Now we do have some cat and now we've got some questions flowing in. So let me cover because these are right on topic. So one of the So it's actually just popped up. It's from looks like Terra projects thanks to all the Sondra for sending these over to me because they're going by pretty quickly Happy
Ron Caruthers 15:06
anniversary, by the way Happy anniversary. Yes, our founder those pictures. Those pictures were
Dominic Cummins 15:12
fantastic. They were awesome. Yeah. Don't go creepy, you know, bring a chase out and look at her pictures from her anniversary but her husband Okay. All right. So focus. It's my eyes.
Ron Caruthers 15:23
Somebody wrote to look at them later.
Dominic Cummins 15:25
I'm looking at the questions of it's my understanding that cash is not at negative 100 blows up and not it is not at negative 8.5%. And understood it makes total sense to have cash on hand hand interested to know y'all take that literally wrote y'all. So I had to I had to put that in there. So it's my understanding that cash is not at negative a negative eight and a half percent and understood it makes total sense to have cash on hand interested to know y'all take so what's your thoughts on that?
Ron Caruthers 15:52
So let me let me jump in on this. What I think they're referring to, which was another question that we saw is what about inflation? Yep. And one of the things that people have done, for instance, if you've liquidated money right now, and you may have gotten rid of market risk for the moment, right, can't take it markets tanking. You know, everything's bad. You traded one risk for another because it's that money sitting in cash. Now, you've lost in one month, eight and a half percent of your value, if that's to be believed. I mean, housing prices jumped 20 19% In February, just in the month of February. So everything seems to get more expensive here. And so that's why we're going to talk about where can you Where can you store cash, still get that competitive return but have access to the money. And so we're gonna we're going to, we'll dive into that. But let's go through some of the other questions. By the way, whoever said any from Bellport have no idea. You have no idea Dominic how many times I checked to make sure Okay, five o'clock in Florence is eight o'clock. Right. But next week or next week, I'm in Greece. So then that week, it's plus 10 hours. So that's six o'clock and I vague.
Dominic Cummins 17:16
So I get over somebody globe, Globe. trata wrote, I get overwhelmed regarding investing, because there's so many options and so much data out there, which is uh, you know, it's a fair point. I think that's probably in response to me saying that we don't get a lot of questions when it comes to the, the investment side of things, what's your what's your advice, when you're when you're, you know, starting out on some of that.
Ron Caruthers 17:37
So I keep it really simple. And we're gonna chat, I saw someone mentioned entrepreneur's Roth IRA. I'm just about to dive into that. And someone right after that wrote, yeah, what is the place to store some cash for opportunity for so we're going to talk about two things today. One is an entrepreneur's Roth IRA. That's my name for it. And the second is we're going to talk about post modern portfolio theory, which is also my name that I wrote down. And I'm quite pleased with, by the way, posts modern portfolio theory, because modern portfolio theory was a big deal when it came out in the 80s. Dude, one of like, Nobel laureate, so I don't know. But if anybody wants to nominate me for a Nobel economics prize, I would gladly take it. But first, let's chat about the entrepreneurs Roth IRA. So the lay of the land down. Oh, and let me let me throw one other thing that you guys that we've chatted about before, but it's something to think about, because what we want to do is be more like the wealthy, right, besides having more money, look at some of the strategies because that's kind of how they got there in the first place. And, number one, one of the top things on the list is the ability to use assets as collateral to secure financing. And again, real tough to do. And with your 401 K or things like that, you can do it with your home, that's called a home equity line of credit or a mortgage or something like that, with a 401 K tougher to do, you can do it with a stock portfolio. And that's what a lot of guys like Elon Musk and Warren Buffett will do is where they'll use the money as collateral to secure favorable financing against the projects that they want to do. So let's come take a look at this entrepreneurs Roth IRA it's going to sound weird so for you guys that are on this you got to stay with me because I fight with randos on Twitter about this all the time because they read an article that this isn't any good. And by the way, before we do that, it is time for a station break. This is in fact on the queue, tell them what it is. This is the show right now
Dominic Cummins 19:55
make more keep more show. My name is Dominic and I typically focus on more than Make more aspects. I've got a long history of sales, career and helping entrepreneurs grow their business, Ron is the keep more side of things. He's a tax and investment advisor. In fact, we've known each other for a little over 30 years, it's first time doing anything together on a business front, but good friends for a long time. Other than go into chargers, other than going to chargers game and having a heartbroken every single year, year after year after year. And I'm sure it'll happen again this year. So we've known each other for a long time. Now, we do this episode, we do this show every Friday at 8am. Pacific, which I believe happens to be four o'clock and the afternoon where Ron is currently in Florence, Italy. But five okay. And then and then the other thing we get asked a lot is is there the show, where can I find the past episodes, you can find them on both of our Instagram feeds. Or you can now as of this week, go to make more keep more show.com. And you can find right now about seven of the past episodes, we'll get them all loaded up in the next couple of weeks. So that's the that's the station break, buddy.
Ron Caruthers 21:02
And that give me a chance to clear my throat. So that's perfect. So back to entrepreneurs, Roth IRA, this is one of those things that they don't talk about a lot. Sometimes they do. But a lot of times you'll hear people laugh at it or say it's stupid, some explaining the truth about this. First of all, when it was first described to me, I spent three years trying to prove that the person that was explaining it to me was wrong and didn't know what he was talking about. After three years, I had to concede defeat and admit that in fact, he was right, I was wrong. So what an entrepreneur's Roth IRA is, and it's very appropriately titled, it is a big rough Ra, you can put essentially within reasonable IRS guidelines as much money as you want. And we have clients that are putting six figures per annum into these accounts. It grows tax advantage, you can distribute it tax free, you can use it as collateral, you can borrow against it. But at the end of the day, your money goes in, let me go further, your money goes up when the market goes up. Proportionally, you don't get the full gain of the market. Each of your gains are locked in every year. So when the market turns around and goes down, you don't suffer any losses. So that's the good of it. What's the weirdness of it? Well, it's built on a life insurance chassis. So I also refer to it as properly structured cash value life insurance. What does properly structured mean? Means you buy it exactly the opposite of the way that most people buy their cash value insurance, or any insurance. Most people are trying to get the biggest benefit, whether it's the death benefit, or the car insurance payout for the least amount of money. And we're trying to do literally the exact opposite of that, which is get the smallest death benefit for the most amount of money. Because then rather than having that money go towards a big death benefit, it goes towards the cash growing inside the account in a tax favorable environment. And the reason that we appropriately call it an entrepreneur's Roth is when they sat down in 1997, to create the Roth IRA. This is where they got the idea from was the way that the wealthy and corporations had been using cash value life insurance for decades. And in many cases, going pre 100 plus years prior. So again, it sounds kind of weird. But what it does, is because of those protections in place, it's a place to store liquid cash, that you can access at any given time for any given reason. And there's definitely some flaws with it. But a lot of my business owner clients use it to fund their practices and their businesses, and again, for either expense or opportunity. So that's kind of the big overview on it. I'll give you some details on it as well, some of the negatives on it in a moment. But do we get any questions? And do we have any audience members left? Or did everybody just cashed out your life? Yep,
Dominic Cummins 24:26
we might have lost a few. We might have lost a few.
Ron Caruthers 24:30
Which is, which is so ignorant. I yay.
Dominic Cummins 24:36
It's all good. We just actually got a pop in question. So Tara projects, again, who who asked one earlier, is there a difference between a Roth IRA versus entrepreneurs Roth IRA, so I think I mean, yes, but it's right. So
Ron Caruthers 24:48
absolutely. So again, the traditional Roth IRA is the retirement single purpose vehicle. It is designed for you to put money in, leave it there until retirement Pull it out tax advantage. The cash value, the properly structured cash value life insurance is a vehicle designed to help fund your lifestyle before you retire. And then it creates a tax free income for you in retirement, one of the questions I just saw by is, Do you need some professional help? Absolutely. This is not taught for the average insurance agent. It's not that the information isn't available or secret information, it's just most are taught to sell the biggest death benefits possible. And just move on to the next client. And it really takes a little time to get it right at IRS guidelines. So that you have the most of the all of the living benefits, and they end up far outweighing the death benefit, which is the one benefit, which is why the IRS and the government gives you all these other benefits because they want you to take care of your family rather than leaving them to the government being the government's problem. That's the why on that. So yeah, you do need someone to set it up. We had I made a really good friend, we're gonna get her on the show. One of these days, I won't say your name, you can just guess who it is. But when we first met to eat, she had heard about this was trying to get one set up, a friend of hers was trying to do it. And I could look at three sets of numbers on the illustrations, and it was not set up to be optimally efficient. And so I like go back and ask him to do this. And he tried a couple of times, but he just didn't know what he was doing. It just wasn't in his wheelhouse. So I'm like, Look, do you want me to do this, just like thank you like, you take this so for. And so we matched it. So it was right at the IRS limits, which meant she gets the biggest amount of living benefits, the smallest amount of death benefit. Now, there's some disadvantages to it. I'll go real quickly. Give you a chance. Were there any other questions to chat about? I want to be fair, and tell you and I saw a question about percentage. Love it, we'll get to that in a moment. That's part of the crew over there. They're all getting ready to go on a walking tour. I may or may not probably won't beat him up later. But my wife already took off for another another tour. But were there any other questions other than what percentage? Yeah, we
Dominic Cummins 27:22
have a few but carry on with? We'll come back to him. We've got quite a few questions, but they're not they're more around some of the other aspects of this. So let's talk, let's go ahead and tell us the downside. What's the what's the what are the cons of this approach?
Ron Caruthers 27:36
Three negatives on it. Number one is because of the way the IRS sets these rules, you can't fund it in a single payment, or you won't get the tax benefits, you can do it. But it becomes something called a modified endowment contract. Where you ideally do even if I we have a lump sum of client for cash, we have to feed it in over three or four years. To optimize the benefits. If we dump it in all at once, we're either going to take forever to show a profit on it. Or we're going to have to we're just going to lose all our tax benefits. So that's negative number one. Negative number two is the one that Dave Ramsey jumps on and susiana sees a really high, but he wouldn't do that Dominic Cummins Say that again. Yeah, the fees are high, they rip you off, they laugh at you. And the truth of the matter is, on most contracts, the fees are front loaded over the first handful of years, so you will see slightly higher fees than normal. However, what they don't tell us the rest of the story, which is those fees actually begin to go down once you get a few years into the account. So what happens is, over time, it actually becomes a very efficient vehicle to own. And unlike any sort of ETF or mutual fund or managed account, where as your account grows, you're paying a bigger and bigger fee with this type of vehicle setup properly. And I gotta emphasize that your your fees actually keep dropping physically like literally get lower in value. And as the proportion, they get even lower because the fees are dropping in real time. And your accounts growing so the percentage becomes lower and lower and lower. Over time, it ends up having the stability of almost like an ETF like it ends up being cheaper than an ETF. If you hold it for a period, which is the other point we're kind of the third negative on this is you do want to hold this. The tax benefits only apply if you hold it throughout your life. You can strip out 95% of the cash and growth and use it for whatever but you do want to keep it in force So one last thing on it, that'll give us a negative is you don't immediately have access to your equity. So if you, we have a lot of clients doing, let's say, $10,000 a year or $20,000 a year, like instead of clients going up to six figures a year, you put in $20,000 a year, you don't immediately have $20,000 available, it's gonna take, take a minute, and then the second year, you put another 20,000 into it, you're gonna have all of that 20, basically, and some of last year's 20, and you get three or four years, and you have a significant amount of cash available inside that account. But those are really the negatives on it. And so again, nothing is perfect, literally, nothing is perfect. And this has its flaws, but there's a lot of good on it. And when it comes to we'll do this another time. But when it comes to how you access your cash, particularly in retirement, the way they credit you, it sustains income, much longer than a normal Roth IRA, regular IRA, mutual fund, because of the fact that you're collateralizing it, you get much greater growth in those later years. So again, some real advantages to it. And we'll bring on an example. We'll give it a few weeks, and bring on an example here. One of the questions I saw Dominic real quickly that I want to address is what percentage of a portfolio my opinion in postmodern portfolio theory, my version of this, we will have 40% of a client's money that they're spending annually go towards this type of vehicle. By the way, if you're wondering where does the other part go, we'll have 40% going towards their qualified plan at work, which usually ensures that we get the match. And we'll have 20% going towards crypto or brokerage account or something like that.
One of the other questions we got is what's a good starting amount to invest with, with you know, starting to make it worth opening a plan, the lowest account that I have right now where it's profitable, my clients doing like $175 a month. And like I said, the highest is six figures. Most of my clients are somewhere in 500 to $3,000 above, in that range. So and by the way, if anybody wants to chat about it, shoot me a DM. We won't chat until I get back from Europe, but happy to sit down with you and just see if it makes sense for you. So don't be shy about that. That's one area by the way. There is another that I want to chat with you guys but we won't need near as much time for that one. And I'm gonna go try and tweak this arm now. Five There we go.
Dominic Cummins 32:46
Holding that holding the phone for too long. So
Ron Caruthers 32:49
nowhere to prop. There's I had a perfectly propped up in the rail. I was like, oh, it's gonna work, right. And then No, no, no, no. Yeah, the Internet was great. I downloaded a bunch of stuff. But I guess the minute we tried to go live and just threw the whole thing into disarray.
Dominic Cummins 33:04
That's crazy. All right, so we've gotten a couple of questions around. There's been a few actually that have had to do with like using your property and your your equity in your house. So there's been a couple of questions like, would that be a place that you would use to fund that? If that was an early question? Like, you know, would you use your equity in your house to do some of this investments right now to use it as a cash opportunity if there are
Ron Caruthers 33:31
so first of all, let's did we lose you? Yeah, I'm losing you a little bit. Can you hear me now? Yeah, no, I'm gonna go back over on this side. The trials of travel anyway, sorry for the weird angle guys and try and try to keep it far away. So a couple things to think about. Number one is we generally don't recommend that you ever pull equity from your house to invest with that's actually SEC regulations. You are not supposed to pull your your equity out. Now generally, people do it all the time. And a lot of the reputable parents companies if they felt absent precision because people do it now sometimes what we'll do is we see that we have to pay off some of the other things that are maybe getting in the way and then with that freed up cash flow we'll go invest that have no problem doing that. And and feel like that adheres to investing in financial advisory best practices and guidelines. But I would never I wouldn't pull money. I might pull money to buy another house. But your if a broker finds out that you've Hold on money from investment or reputable insurance per se in or we're kind of all of it, we wouldn't take that money, we would look at it another way to do it. And again, I'm not saying that just as a CYA, I'm saying that because really, I wouldn't
Dominic Cummins 35:16
sure make sense. So you're breaking up pretty, pretty good right now off and on. So I think we got most of what you said, but might have lost it. So we can I think ROG probably shoot a video when he's got some chance to just kind of go over that around using your equity, but short version of it is folks is don't use your equity, necessarily, there are some ways to kind of structure that in a more meaningful manner. But don't don't go about just borrowing out of your house to go throw some money at some current investments when the markets unstable. That's probably the the short version of it. And it's not just Ron saying that that's literally SEC guidelines.
Ron Caruthers 35:53
But by the way, there was the guy who wrote a book Duguay Andrew is complete douchebag. Nice guy. But he's, he's, he's heard a lot of people. He wrote a book called misfortune. And misfortune was all about, oh, freeing the equity in your house. And he had a bunch of people put money pull money from their houses in, oh, 506 and oh seven. But he promptly turned around and lost by trying to be cute and clever. And he basically got chased out of the business. Then came back as an educator, because he lost all his licenses, and turned around and did the same thing a second time. And so again, met him likes the guy personally. But as far as you got to be really careful on that. Did that come through a little bit better? It looks like I lost hotel internet here. And I'm on some extended network. Yeah. Coming through. Yeah,
Dominic Cummins 36:48
it's coming through. You're a little laggy. But you know, that's, that's No, that's no huge deal. So awesome. Yeah. So just for those of you who are joining in, I'll do the ID on the show just because you know, bronze internet. This is the make more keep more show. And we hosted every Friday at 8am. I'm Dominic usually focus on the make more stuff or on gifts focuses on the keyboard stuff. He's currently in Florence, where the internet appears to be, as Northern Italians are suspicious. So the the sorry, the family joke. So long thing. We don't hate you. We do like your food, but southern Italian foods better. So the this is the show. And if you want to see back episodes, we have about seven episodes. And actually, interestingly enough, while we were sitting here it went live on Google. So we're now on Spotify, Apple and Google's podcast, make more keep more show, you can also go to make more, keep more show.com. And you'll be able to pull up our show and see some of those past episodes. And we'll get the rest of them loaded up in the next week or two. So but yeah, so what we've been talking about today is this idea of like, where to park your cash. So what do you do right now while there is, you know, what do you do while you're in this marketplace, that is all over the place? It's up 501 day down 600. The next and, and kind of all over the place, we actually hit the the official definition of bear market, I believe, a few weeks ago or a week ago. So we have, you know, it's really kind of an interesting place. So Ron has been talking about what he calls the entrepreneurial Roth IRA, which is properly structured out cash, excuse me. Cash Value life insurance. Excuse me, let me say correctly. You're doing your and then that the the you said you had another one. So why don't we Why don't we talk through that?
Ron Caruthers 38:35
Yeah, so here's the thing to keep in mind. Bonds suck. So I'm not a huge fan of bonds never have been. And part of the reason that bonds suck so bad is because entire projects, if you shoot me a DM, I have my team put a whole free course together on it. So if anybody wants that, just put course. Send a DM I'll get it out to you guys. It may not be right away because we're fixing the bounce out for the weekend. But we have like a 12 or 13 Episode little mini course actually put that word put mini course in there because we have another course that as soon as we can get Click Funnels working right, we're gonna we're gonna buy on just overall finances. But bonds suck because you have all of the risk of the stock market with none of the upside. So people have we've all been taught that bonds are nice and safe. I'm going to try and see if we can prop this up here. Sorry, guys, you're getting back because my arms about to fall asleep. Hold on. There we go. You'll at least get one corner my face. Anyway. So part of the theory of post modern portfolio theory is that bonds, especially the last 20 years, have really had some problems with interest rates being so low and so on the ones right on the after tax side, we use cash value life insurance set up properly as a place as an asset class onto itself, where you get the upside of the market, none of the downside, and you have access to the money, which is really important, especially if you are in a business. What about money that's inside a qualified plan. So you don't have the option of putting that money in cash value life insurance, unless you pull it out, pay all the tax on it, and the penalty, and then turn around and reinvest it, which again, we would never recommend to a client. Now there's exceptions to every rule. And we have done it at what point was that a work or starting a business that had some losses, and we just figured, alright, let's get some of these taxes over with. Sure, like The Blair Witch Project, if any of you guys were old enough to remember that. So anyway, inside of a qualified plan, we use something called an asset backed pension for some of the money. And here's all announced that backpack, Jeunesse, during the years where you're accumulating money, where you're accumulating wealth, you get the upside of the market, none of the downside. So again, you might get seven, eight, or 9%, if the markets doing 12, or 13, or 14. But if the market loses 20%, your money is exactly zero, you lose. I mean, it doesn't go to zero, you lose zero, you get a 0% rate of return, but you lose nothing. And so we actually had a client complain about that last week, this was hilarious. Because she's like, Well, I only got a 2.6% rate of return, you know, over the last year, like, that's not gonna get it done. I'm like, woman every everything else you own is down 25% Are you your husband's work 401 K deaths 25% Are you really complain that you only got to 2.6%. Okay, that makes sense. So during the accumulation years, an aspect pension goes up with the market never goes down.
But the real magic is when you retire, you convert it to a lifetime increasing in and you have it just on your own life, or on your life and your spouse's life. And so essentially, what you're getting is that mailbox money, where money just comes in every month, whether the markets up whether the markets down, just like a Social Security check. And what the financial institution will guarantee is, is that it will go as long as one of the spouses is alive, you cannot outlive it. And even when your account value actually drops to zero, they will not only continue paying you they'll continue increasing the amount. Now how they do that and all the math behind it. That's that's for another day. But again, we'll take a client and we'll try to cover their mug, which is mortgage utilities and groceries with Social Security, their own pensions, and then we'll replace the difference with this asset backed pension. And then we can take what's left over and turn around and put it in the market. And that way, we've taken all the pressure off them. Because if the markets down, it doesn't matter, because we don't need that money because we got this other money to live on and maintain standard of living and still traveling do all the other things. Does that make any sense at all dominant?
Dominic Cummins 43:40
Yeah, that definitely need to talk to your professional about that one do you? For once you got me one, one, or I was like, Okay, I'm not following totally. But I think that the key for a lot of this is is like the I mean, the cool thing is we try to get to every this is just for everybody. Honestly, we try to get every question on here. We can't always get to all of every question. Or we kind of go off that topic. And it's hard to come back to it. But if you ever hear something from either one of us that you are just you know, wants more clarification on, hit us up in the DM referenced the show. And I know I've had some people send me some sales questions and things and if you reference the show, it makes it a lot easier to kind of sell tell where where it was coming from. So if you are looking for some clarification on some of this, please do so somebody asked earlier, what were the three vehicles to put your dollars and I think what we really talked about is to primarily obviously well, I guess three if you can just count good old fashioned cash, but the main things were the the ability to get the properly structured cash value life insurance, or as Ron refers to it as the entrepreneurial Roth IRA. And then the one that we just talked about was a little more complicated but an asset backed. Was it called asset backed pension, pension, pension. So Tara projects asked, Is this this in the mini course as well? Do you cover this,
Ron Caruthers 45:04
there's nothing about, there's nothing about that on the mini course, Tara just reach out to her projects, if you want to chat. It's what's what's ironic about it is, it's way easier to set up, it's way less complicated. In actuality, the cash value life insurance is trickier. Because the asset backed pension, you can literally just write a check, or have money transferred over from your IRA, you know, from your IRA, your 401 K and your dog. Whereas the cash value life insurance has to be very carefully crafted. And look, you still need, like, there's different companies that offer this, we work with a bunch of them with our clients, because in different circumstances, one company is going to do a little better for a client. In other circumstances, another is going to do better. So there is some some adult, you know, Supervision Required on some of these. But but the asset back pension if you pick a good company, and the right version of what they're trying to do is a lot easier to set up than the life insurance, which requires medical exams, and again, a kind of fine tuning of what you're going to get there. But just know, in both cases, the simulator similarities are as follows. They both go up when the market goes up. The worst you'll ever do with either one of them is zero rate of return. But zero is literally your hero in this case, because what it means is everything else was going down, and you don't lose any money. Now, you might be a little capped on your upside, but would you rather have 10% on a given your all your money, or 15% of half your money, because you had a big loss. So sometimes people get hung up on those numbers were like, math ain't money. You know, money and math are two totally different things. And so what you want is the most amount of money in your account, not the quote unquote, highest rate of return, if that may be sets, sir. Does that make sense? Dominic? Yep.
Dominic Cummins 47:06
So I think what there was a good question earlier, from globe trata, who
Ron Caruthers 47:11
I might get, hold on, I might get high soon, we got somebody painting here in the lobby, all kinds of fumes calling
Dominic Cummins 47:19
the show. Alright, so Globetrotter, asked who happened to laugh at my Italy joke earlier. So you know, already topping my book. But anyway, what are the alternatives to leveraging your assets to invest in make more? And I think we've talked a little bit about this. But let's talk about that. Because I think some of these things are kind of, you know, predicated on something else. Where would you say that are? You know, where do you where do you put some things that are non leveraged, if you will?
Ron Caruthers 47:48
Well, that's a great question. So let me let me give you an answer on what we did for a client recently. And what we see JP, we'll get to your question about last. But we had a client retiring to 70. And we had about half a million to work with, namely, the pension and Social Security as well as the teacher, she's going to get a pension. But he needed an extra $2,000 a month from this 500. And so we basically stashed four years worth of that money. So 100 grand, basically in cash, and super low res, little bit of bonds in their tiny little bit of stocks, mostly cash. And the goal is we're just going to spend that over the next four years, no leverage required. Then we took another couple 100,000. And we bought an income stream from it that we're not going to turn on for four years. Now that income stream from the answer back questions, we'll start off at about 13,000 a year, he only wants 2000 a month, so 24,000 a year. So we'll supplement it with the other 200,000. So 100 state spending over four years 200 into the asset back to 20, I think was leftover into the markets. So here's what we have, without any leverage. We have 100, we have four years of income, totally safe demand, it doesn't matter, the market can go straight down for the next four years, it's not going to impact in one back, then we have the asset backed pension ready to kick in, and some money in the markets. And in about 10 more years after that the asset backed pension because of the increases will cover the whole 2000. So that is the rest of his stock when he can just sit there and grow. And that's how we layered his account, again, to pull as much risk off the table as possible and yet still leave the possibility for growth. So I don't know if that totally answered the question that we had. But that's the sort of thought process when we're setting up a financial plan for someone that we're looking at, which is how do we minimize taxes? How do we maximize return? How do we minimize risk How do we stretch out longevity? So it's not an ish?
Dominic Cummins 50:02
Well, and you bring up a great point by discussing some of that stuff right there. What you just said was that I think for newer investors, and some of the folks early on were like, oh, man, there's so many choices, where do I go? What do I put my money into, is what you just brought up is such a great example of why you would work with a financial advisor, and why you want to work with an expert. And we've brought this up multiple times on the show. It's not just Ron and I, but like, we've had mortgage experts, real estate experts on here, we'll have some more tax experts and investment experts on here for specific types of investments. But what happens is that I see for newer investors as they get really excited, and they read the Internet, and they say, Oh, I'm gonna go throw some stuff in crypto. And what happens is, you get a big, you know, hit like we've had in the last few months, weeks, months, on crypto, and all of a sudden, you hear these people who go, Oh, my God, I lost most of my money. Now you get new stories about like, oh, Elon Musk lost, you know, 2 billion in the crypto market, he didn't care he was working on a billion dollars, right? It actually doesn't matter and kind of Ford. Elon can afford to lose it. But also Elon is not concerned. Because when you start to structure things correctly, you use a loss to offset something else to minimize your taxes. Right, you'll go for because you're gonna have some investment. If you're doing it right that well, your crypto stocks tanking, he's probably got stuff that's just killing right now. And you have the that's the smart play, right, you're somewhere. And I brought this up a while a couple shows ago is that in a down market, somebody's making money. Now, depending on your mindset, and depending on your advisors, it should be you too, right? But people are making money in this in this environment, lots and lots and lots of money. In the down market. There were lots of people who made plenty of money during COVID. And and it's really has to do with a mindset and proper allocation.
Ron Caruthers 51:58
And let me go right back to an example of that. And then I'll answer lovely, cGMPs question. So going back to this, if you've got 40% of your money, inaccessible cash 20% In insecurities or something like that, but that's not as tied to your qualified plan. Right? Now, when a market tanks on your brokerage account, you can you can use margin, meaning you can go to the brokerage firm, get a loan against those stocks, and just like Elon Musk, or Warren Buffett and use it to buy into the market, you can do the same thing with your cash value inside your properly structured life insurance plan. And they don't ask questions like they do in your house. So if you want to borrow money against your house, they're like, alright, well tell us about your job. And let's look at your recent credit history. Oh, Mr. covens, we don't like this. And you know, we're gonna turn you down for getting access to your money on your house. They can't do that on the life insurance side of things. They're just like, great. Do you want the money wired, you want to check? No questions asked. So now you can use that liquidity to buy into the markets. You know, now again, you're taking risks. So you got to be sure that you got the stones to hold tough. But that's how you begin to tie this together and how you have the liquidity available to pounce on an opportunity when one presents itself. Real quickly, because I know we're at the top of the hour. Lovely CJP. So what are the negatives with the asset backed pension number one is, generally it's a vehicle that your setup and you will leave alone. So it's not something you delete out, I'm going to try this for a little bit, see how it works out, you're moving money over to that kind of kind of leave it there and eventually convert it to income. When you when it goes up, you will not always get the Oh, and Globetrotter we're happy to have you, you're not gonna get the full upside of the market. So people are well, you're getting ripped off on that. No, you're not supposed to. Because remember, it's not supposed to replace the equities and the mutual funds and ETFs in your portfolio. It's meant to replace the bonds. So and then when you go to retire, or be financially independent, I like that word better. You just turn it onto lifetime income if the time is right. And again, that's where some strategy goes. That's really your biggest fee. And, well, your biggest negatives, I guess the one other is is if leader you decide who I wish I hadn't done that. Then depending on where you're at, some of the companies are going to charge you a little bit of a penalty there. It sucks. It's not that big of a deal. Because if you compare it to losing 30 or 40% of your net worth in the markets, which can happen. And in my entire career, I've had one guy back out of one of these types of accounts where they took a little bit of a loss and it was because His wife had Ms. They were going to Mexico for some experimental treatment. And he literally was liquidating everything. Just like I would just like you would dominate. If our wives needed medical care. We're like, eff it. I don't care about the losses. We're gonna fix my woman hair. And by the way, I've been married. I know you had an anniversary. Mine's coming up on Sunday, 12 years to beach brownie. And you're like, 11?
Dominic Cummins 55:23
Yeah, it was 1111 Two weeks ago. And all Sandra who helps us out with the show and is my sister in law. We just had nine noes,
Ron Caruthers 55:33
which you didn't have or I didn't have clearly professional.
Dominic Cummins 55:39
But yes, let me let me give some thoughts. Just real quick on this. I know we're at the top of the hour wrapping up here. And
Ron Caruthers 55:46
I'm gonna go, I'm gonna go check that out. I think give us a free day tomorrow. Donatella exhibition. I'm gonna love that. Because I've seen enough gardens for now.
Dominic Cummins 55:57
And then go to the panorama store course when you're in Florence. That's the flagship panorama store by the Duomo there. So
Ron Caruthers 56:04
I got the Amiga there, I'm gonna go in and make them and make them jealous. I can use a panther. I don't have one.
Dominic Cummins 56:11
Yeah, exactly. They're good prices there, especially with the Euro down right now. But no, no, it says everybody, here's here's the thing that I do see, sometimes when these discussions come up, when we're talking about investments, and we're talking about like, get cash in place, and it's a down market, and there's opportunities, there is going to be a piece of the audience who's sitting there going, like, Hey, I missed out right? And, and you know what that's, that can be feeling a bit defeating at times where you're like, look, I don't have cash, I don't have places to be in there. And part of the reason we started this show is that it's like literally the make more and keep more side of things, right. And two of those things, those things play together really, really well. So all I would just say from a mindset perspective is, is don't be disheartened right? Now, if you're not in a place where you're putting away cash into a structured cash value policy, or, you know, policy. You know, Ron talked about it that What did you say your lowest point was 170 a month, something like that? Yeah, that is something where you can do what you can, you can likely do, even if you're relatively new in your business. The other thing I'll say to you is, and again, we talked about this earlier in the show, is the idea that that often what happens for business owners is we pay everybody else first, one of the most difficult things I ever heard one of my mastermind members say when she first joined us was she goes, Man, I had my best month ever. And the only person who didn't get paid was me. And that that kills right. And I think for as entrepreneurs, we probably all had that probably likely early on in our business. We had those moments. So what we're trying to accomplish with this, make more keep more show for those of you reached out a whole bunch of people join on. I'm Dominic. And that's Ron. He's currently in Florence. I'm located out in Los Angeles. But the we what our goal is, is to help you out in San Diego, Well, normally yes, you're in San Diego, yes. But we're really trying to help you get to that place where you can prioritize your finances first and foremost, right. And then to not pay all everything to your respective government, and most most of our audience, probably for Uncle Sam, but also how to make money, how to take advantage of these markets. And look, the we don't know how long the downside of this market is going to last. But it could be a while. And so you have an opportunity. If you keep your head right and your mind, right, you can have an opportunity to make some serious money and go out there and do some great things. So I'll just put that out there for for the folks joining on. If you weren't in a position to take advantage of all this stuff during this discussion, don't don't feel bad about it, just use it as an opportunity to go like cool. That's some stuff I can work towards.
Ron Caruthers 58:54
Totally. Look, we're at the top of the hour, and my arm is completely asleep from trying to hold this phone. So we do have the first seven episodes posted at where can they find that again, Dominic.
Dominic Cummins 59:09
It's make more keep more show.com I'll just put it in the chat here too. And you guys can check out those. And it's also available on you know, Spotify, or the Spotify, Google and Apple.
Ron Caruthers 59:26
And while we're on the show on Google, and then I'll also post this so it will be in my feed Dominic will add it to his feed so you pick your your poison as far as how you want to if you miss this how you want to catch up. And that's it. We'll do it again next week. And it was great having you guys globetrotter. Lovely CJP tear projects. We love having you guys on here stuff is a jam packed. You guys enjoyed it. So I'm gonna see you next week. I'll give you a quick shout about some funny,
Dominic Cummins 59:57
guys. Good. Have fun. Talk to you soon.
Transcribed by https://otter.ai
