The 4 pillars supporting my Purposeful Plans are the key to the retirement you’ve desired.
One of the things people ask me is do I base purposeful plans on any particular formula? Well, yes and no. Those who have read me or seen my videos understand what I think about formulas and it’s not good. The saying that I repeat that I heard from my mentors ad nauseam, often followed by slaps in the back of my head, literally, was that formulas are good and they always work well until the day they don’t. The thing is you never know when that day comes. Relying on formulas is not the way to do it. What you want to do is first of all have a foundation for your plan, understanding why you are using that particular foundation. Now I tend to like four pillars to the plan that I build as a foundation. Now, two of them are the same thing, discounted notes. But, one pillar is inside a ROTH envelope, tax free in other words. The other one is in your own name that you can use at will as part of your plan to make it happen faster and end up bigger and usually both. The third pillar if you’re young enough, and by young enough I mean probably no older than 45, 48 years old, then I like an EIUL, which stands for equity index universal life insurance policy. Let’s don’t get lost in the fact it’s insurance. Here’s the only thing you need to know about it, and there’s two things. One is every other insurance plan that you have heard of has to do with you dying and your heirs getting money. This is for retirement tax-free income, before you die. The second thing you need to know is that you pay it for a defined period of time, and then it gives you from that end period, usually for 20,30 more years a flat, reliable tax-free amount of income per year. Again, the key phrase tax-free. So, an EIUL would be the third pillar. The fourth pillar, and people are always surprised that I save this for last, is investment real estate for income. It just burdens my soul every time that I have to say this out loud because I am, at heart, basically a real estate investment broker. When you end up in retirement and you were able to bring in all four pillars into play, you are going to have so much income at retirement, especially if you had at least twenty years or maybe even just 10-15 if you had a large amount of money and good income to start with, that real estate ends up being the bank of your family at retirement. It’s not that it’s not going to give you a really nice income, don’t get me wrong. When you’re making six figures from an EIUL tax-free, and you are asking six figures from notes, both in your own name and tax-free from a ROTH, 50,60,70,80 thousand dollars from real estate doesn’t tend to impress you. What it really becomes though, is the bank of your family. Let’s say you are in your early 70’s, and your buddy calls and said hey, Frank passed away and Mary wants to sell you that cabin on the lake in Tahoe. It’s going to take 650 thousand dollars and she’s putting you first in line, but you have to have it in six weeks. It’s a phone call to your lender. You borrow the six fifty. It’s not just tax-free. It’s not a taxable event. You take the six fifty, you buy the cabin. You are in love again with your real estate. You don’t care you lost a little bit of that income. You are making too much tax-free on the other things you are making. What you did was you enhanced your retirement subjectively thinking, by getting another place to have a good time, which was the whole idea of retirement in the first place, but the bank we call real estate that is free and clear, and that’s why you take the four pillars, do it on purpose and if you can get all four together, and you meld them together synergistically, your retirement is going to be a blast.