Get taxes over with now on your IRAs and
401Ks. In this episode, I'm going to
address the question what is the best
thing I can do with my money during a
recession? So, my name is Doug Andrew and
get ready put your seatbelt on because
i'm going to show you some opportunities
you probably never even knew existed
before.
So, my name is Doug Andrew. And what do I
know? Well, I've been around the block now
for 67 years. I've been a financial
strategist, retirement planning
specialist for more than 45 years. And
I've lived through many, many recessions.
And I learned some valuable lessons and
I don't want you to make the same
mistakes that maybe I made or that many
people have made. In fact, helping people
avoid losses during the downturns in the
market. But also take advantage of the
upswing on a tax-free basis has helped
so many people gain peace and
contentment and actually accumulate
tremendous amounts of wealth. So, I'm
going to share with you sort of my stories
of not maybe the 1980 recession. Yep. I
remember that one. And the one that
I'll never forget is what we call the
Great Recession. So, if it's feeling as
you're watching this a little bit like
the Great Recession, listen close because
I'm going to give you a story about what
happened from 2000, the year 2000 to 2012.
And how many of our clients more than
tripled their money during that 12-year
period when most Americans didn't make
anything at the end of the day. So, when
we go through an economic recession, what
do most people do? They hunker down. They
almost get paralyzed and somehow most
people get into this mentality, "Golly,
I've just got to wait now till the
market comes back before I do anything."
No. There's opportunity here
when the market is down. So, let me share
with you a story of what took place with
many of our clients from the worst
decades since the Great Depression. It
was actually a 12-year period that we're
talking about from the year 2000 of 2012.
Now, if you remember that things were
going pretty well at the turn of the
century. But September 11th 2001
2 planes of
into two skyscrapers in New York City
and guess what's happening? People
stopped going out to dinner. They stopped
flying and so forth. And this is what
happens when we have pandemics, terrorist
attacks, natural disasters. And so, when
people get paralyzed, they just
aren't thinking about the opportunities
they ought to seize during that time
period. So, what happened in 2001 is
people stopped buying and selling and
traveling. And sure enough, the market
dropped 3 consecutive years. That's
very rare. Usually in a 10-year period,
you'll have 7 up years compared to
only 3 down years. And during that
decade from 2000, 2010 we had 5 down
years only 5 up years. So, the sad
thing is a lot of people lost 40% or
more in the value of their life savings.
Their IRAs and 401Ks in that 3-year period from 2001 to 2003. So, let's
use an example. Let's say that you had
saved a million bucks by the time the
turn of the century. 2000, it happened. And
without adding a dime, you see that
million-dollar nest egg dwindle in value
down to less than 600,000. 40%
loss by 2003. How would you feel? This is
where most people panicked and they and
they sold at that low point. But some
people then bought back in high. And that
that's why they don't average very much
money because they're buying and sell in
the wrong time. They don't average a very
good rate of return on their money. Well,
it took four years for the market to
come back. Because a 40% loss has to be
followed by a 67% gain just to
get back to break-even. A million dollars
out of 600,000. 600,000 now has to grow
by 400,000. two-thirds of that to get
back a loss of 40%. A lot of people don't
understand that math. It took until 2007
to get back to break-even. Many about to
retire people back then felt like they
had lost their future in 2001.
They had to put off retirement 7
years. And then what happened in 2008?
So, as Warren Buffett put it, when the
tide went out in 2008, it revealed who
was swimming naked is what he said. Now,
what did he mean? A lot of people thought
that they were okay but they actually
didn't have safety nets on their money.
And one of the things that Warren
Buffett always taught is number one rule,
don't lose money. But rule number 2 was
don't forget rule number 1. Sometimes,
people don't think about this until it's
too late and they've suffered a
tremendous loss on their accounts. So, for
the second time in a decade in 2008, in
one single year, most Americans saw their
nest eggs go down another 40%.
The million went down to as 600,000.
Now, do you know it took 4
more years again to get back to
break-even in 2012? So, most Americans
that had a million bucks in 2000, saw it
go down to 600,000 and then back up to a
million in 2000. Down to 600,000 again
and barely back up to breakeven again
after 12 years. That's why we call it the
Lost Decade. It was actually 12 years.
Here's the key: During that same 12-year
period, many of our clients using what I
call the laser fund with indexing
strategies tripled their money tax-free.
If they started out with a million, they
had 3 million by the year 2012 when
most Americans were barely back to
break-even. And it actually wasn't
breakeven. Because inflation during that
12-year period had caused that million
dollars people were back to couldn't
even buy what a million dollars bought
back in 2000. So, it was really only worth
maybe 7 or 8 hundred thousand.
Folks, you need to understand indexing
and how not to lose when the market goes
down. But here is another critical key:
In 2001 to 2003, in 2008; I advised many
people who were not clients yet when the
market was down to get their money out,
sell. And they go, "Wait a minute. Most
advisors are saying, hang in there. Hang
in there because the market always comes
back." And I'm telling people to sell. Why?
Because I wanted them to get the taxes
over and done with when their account
values were only 600,000. Not wait
around until it goes back up to a
million again because we got the taxes
over with and we repositioned the
after-tax money into a Laser Fund. And
they were able to ride the market back
up again tax-free. Folks, this is an
incredible opportunity to get taxes over
and done with on 600,000 instead of a
million in this example. Hello! And then
ride the market back up again tax-free.
Because we all know, taxes will likely be
higher in the future. Why? Do we want to
postpone tax to some future perceived
unknown advantage in an IRA or 401k when
most of us know that taxes will likely
be higher in the future because of
irresponsible government spending and
printing the money and initiatives
that the government has to constantly
spend dollars on? So, why do we want to
postpone that tax and let our account
grow back to this and then pay tax on
this much when tax rates are likely
going to be higher? That doesn't make
sense. I want you to click on this
episode here and you will understand how
the Laser Fund can help protect you from
the dangers of taxes inflation and
market volatility so you're protected
the next time and you can seize the
right opportunities.
