How I Legally Avoided $300K in Taxes – Find Out How | Ian Lahde DSH #540

Very little.

A little.

Yeah.

And that's crazy on your level of income.

Yep.

You're saying you're doing a million a year, paying little, if not, right?

Less than 30K.

Wow.

Yep.

That's, yeah.

Donald Trump does similar things, right?

Yes, yes.

A lot of the wealthy people, see, the thing is, there's vehicles out there that they're available to everybody.

Most people just don't know about them.

And, you know, making a bunch of money is one thing, but it's not about how much you make.

It's about how much you keep.

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All right, guys, we got Ian Lottie here today.

We're going to talk wealth strategies, right?

Yes, sir.

Let's do it.

I'm all about saving and making money.

Absolutely.

How'd you get started in this?

Well, so I run a few businesses myself, and I was approached a couple of years ago by someone who was an accountant, CPA, and that sort of industry.

And really, he was like,

What are you doing for tax mitigation?

What are you doing for things like that?

And, you know, most CPAs, they kind of are more focused on compliance, but not a lot of them are focused on strategy, structure, and things like how to put your business and your income in a position to where it's advantageous when it comes to write-offs and things of that nature.

So I spoke with him a little bit.

I had a business at the time that was doing about a million bucks a year net profit.

Wow.

And so I was just like, oh, I just, I just pay 300K in taxes every year.

And he's like, are you crazy?

And I was like, I don't know, I guess.

Am I?

So,

you know, spoke with him a little bit.

He started introducing some vehicles, cash accumulation vehicles that are backed by insurance products.

So life insurance and got me really intrigued, got me interested and talked about how we could kind of mitigate a lot of my taxes and then also fund a retirement plan for me and my employees.

And I got really interested in it, asked him how much he was making by selling me a policy.

And I was like, where do I sign up?

And so that that became a bigger business for me than my previous business that I was, when I was, that I was doing when I was approached.

I love it.

And you haven't paid taxes since?

Yeah, very little.

Very little.

A little.

Yeah.

And that's crazy on your level of income.

Yep.

You're saying you're doing a million a year and paying little, if not any, right?

Less than 30K.

Wow.

Yep.

That's, yeah.

Donald Trump does similar things, right?

Yes, yes.

A lot of the wealthy people see the thing is there's vehicles out there that they're available to everybody.

Most people just don't know about them.

And, you know, making a bunch of money is one thing, but but it's not about how much you make, it's about how much you keep.

Yeah.

You know, no, for real, because my income last year was about 300 and I paid 100 on it.

So

you're doing something good.

You're in a state that has no, no, no state taxes.

Yeah, that was just federal.

Yep.

Federal is like what, 37?

37% is the highest tax bracket.

Yeah, 100K.

On 300, that's a lot.

Absolutely.

You know, because I already invested most of the 300 before I had to pay taxes.

So that was actually a big hit.

Yeah.

So, see, I mean, for like business owners, you can do things, just simple things like, you know, insurance products aside, you can do things like a defined benefit plan and essentially pay yourself from the defined benefit plan.

And it's like an employee retirement incentive.

So similar to like a corporation would pay themselves, their employees, do a 401k match, a 403b match.

You can set up a defined benefit plan as a business owner.

And since you're an employee of your own business, you can pay yourself from the business account into the defined benefit plan.

That's your retirement account.

And it's a write-off.

Right.

So is that what Gusto does?

Because my financial advisor was telling me to look into Gusto.

Yeah, Gusto, it does similar things like that.

Yeah, it's similar.

They use different strategies and different structure, but

the defined benefit plan is just one example.

There's a lot of different vehicles out there.

Like I said, there's cash accumulation accounts that are backed by insurance products.

And when people hear about life insurance, they don't think about money growing tax-free or retirement savings.

They just think about, oh, my family will get this in case I die.

And that is a benefit of having a life insurance policy, but there are cash value life insurance policies where you can put money into, dump a bunch of money into, and then borrow against it tax-free.

And all of the interest you're in is also tax-free.

Also, you know, the money in a life insurance policy has zero stock market risk.

So you put money into a 401k, you put money into a brokerage account.

Well, unfortunately, you don't have a crystal ball and neither do I.

So the money in there is just exposed to the market.

The market goes down, you lose value.

The market goes up, you gain value.

It's really a gamble.

Yeah.

You know, long term, yeah, the market goes up seven or eight percent a year, but honestly, seven or eight percent is, is a, not a great return at all.

We've just been conditioned to think that's a good return because any finance person will say, Hey, 8% a year, you're doing great.

Well, after taxes and fees and all the other stuff, you're netting maybe 4%.

All the programming, they give you 8%.

SP isn't a great investment.

Yep, 4%, that hardly keeps up with inflation.

It doesn't even keep up with inflation.

It doesn't keep up with inflation.

Yeah.

You would, I mean, inflate, you know, with the two biggest destroyers of wealth these days are taxation and inflation.

Okay.

So again, taxes, 37%, even if you're making a million dollars a year, right?

37% is 370,000.

That's not any write-offs or anything like that, but imagine cutting a check to the IRS every year for 370K.

Even making a million dollars a year, that's brutal.

You can buy a house in some places in the country and cash with $370,000.

And you're just writing it off, poof, you might as well light the money on fire.

It's gone.

Pretty much.

Who knows where it goes to?

You're never getting that back.

And if you overpay to the IRS, it's very difficult to get your money back.

Oh, is it?

Yep.

Wow.

So I'm not saying to underpay.

That's not necessarily good.

You don't want the IRS coming to your house and knocking on your door.

But it's just about being smart and speaking to the right people and having a team behind you who can help you just structure and mitigate your taxes all legally, of course.

Right.

What are the risks of the life insurance?

Is there a chance it goes to zero?

So, nope, no risk.

Really, I mean, there's risk with anything, any investment, but insurance companies have been around for hundreds and hundreds of years.

You know, if you look at how many banks have gone out of business in the last 100 years, we're looking at thousands and thousands.

I mean, I don't know the exact number, but it's got to be 8,000 plus.

Wow.

Banks have gone out of of business.

We all know we've heard a couple of years ago about the bigger banks going out of business, Silicon Valley and things like that.

But there's tons of credit unions and mom and pop banks that go out of business every week, you know?

But if you look at life insurance companies, not one single one has gone out of business in the last 100 years.

Wow.

Not a single one.

Crazy.

The reason why, the reason because of that is, you know, when you go and put $100 into a savings account or a checking account at the bank, By law, the bank can lend out 100% of that for mortgages, auto loans, and things of that nature.

So they don't have to keep any money in reserves, You know, so if you go and let's say you had 300,000 in the bank and

so did I and we went and tried to take it out all at once, there is a chance that they won't be able to pay us right away.

You know, if everyone goes and tries to liquidate their money on the same day, it's just, that's what happened when Silicon Valley failed.

It's almost like a Ponzi.

I mean, sort of kind of, but banks are so tied in with the government and things like that, that there's just, it's one of those like too big to fill type concepts.

But, you know, on that same breath, when you go and put $100 into an insurance policy, you know, it's called premium.

You pay the $100 of premium into a policy.

Well, by law, most insurance companies have to keep one for one.

So $100 in reserves for every 100 you put in to basically protect your investment, if you will.

Yeah.

Yep.

So if everyone died and everyone liquidated their money on the same day, they'd be able to pay everybody back and then some.

So that being said, do you have any of your money in a bank?

I keep very little.

I keep just enough in a bank to basically pay the bills and maybe a couple extra thousand dollars just as a, as a cushion, if you will, but very little because money's meant to be moved.

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You know, so

it's just about moving from column A to column C and you just have to figure out who's going to be B and help you do that.

You know,

money's not meant to sit in a bank.

Obviously, we know, like I said, inflation is a killer.

And, you know, people will have $250,000, a million dollars sitting in a bank account.

And sure, let 10 years go by and see if that million dollars can buy you the same thing that it bought you 10 years prior.

Yeah.

And it can't.

We all know that.

That's pretty obvious.

So I keep extremely little in a bank.

To be honest with you, I pay all my bills with credit cards

because I know you've had a lot of people talk on the show about credit cards and the advantages of that.

Well, you know, with the points and things like that, I mean, if you pay your bills with credit cards, if the banks allow you to, well, I would highly recommend it because as long as you can pay it off and you're being smart with it um at the end of the month then you the points you get is insane you'll never have to pay for travel ever travel hotels travel hotels flights cards are amazing and some of them are 0% for the first year 0% 12 months yeah oh my god if I get a 0% card I max it out and and I just as long as you're making the minimum payment it is an interest-free loan for 12 months yeah you can park that money elsewhere and make money with it and then just pay it off at the end of the 12 months easily and you could get 100k per LLC easy like first day you sign up oh yeah there's so many business funders and people like that that are in the space out there that you just got to message honestly message message one of them on Instagram and be like, hey, I'm looking for some funding.

They'll set you up and you'll have 100K in 48 to 72 hours of something.

Yeah.

Lots of perks of living in America.

That's right.

That's right.

It's a piece of plastic and, you know, you're just,

you're literally banking with it.

Yeah.

Yeah.

Any 18-year-old can just change their life completely.

I know.

It's nuts.

Like people struggle to get that first initial capital to fund their business, but they could just do it with credit cards.

I mean, it's kind of risky, but.

Yeah, it is risky because, I mean, of course, you don't want to have to default, but you know, I'm not saying that bankruptcy is a good thing, but we do have a reset button in America, bankruptcy, because you just got to hit the reset button.

And especially if you're young and you don't have a lot of assets, I mean, look how many wealthy people have gone bankrupt.

Most wealthy people have been millions of dollars in debt at some point, like negative millions of dollars before they actually made it.

Yeah.

Didn't Trump go bankrupt a couple times?

Seven times.

Seven times?

I believe.

Yep.

Holy crap.

And he's a billionaire.

Billionaire.

He's not.

So, you know, but most people can't stomach that risk.

Yeah.

Imagine being $3 million in debt and owing the banks $3 million and not having, you know, that's, that's tough for a lot of people.

Yeah.

Most people would give up, or if they get out of it, they're not going back to be in that position again.

Absolutely.

So our parents taught us about IRAs, 401ks.

What do you think of those traditional methods?

You want my honest answer or my political answer?

Let's keep it real here.

Well, I think they fucking suck, to be honest.

Same.

They fucking suck.

So

you've heard of pensions before, right?

Well, people in America used to get pensions.

Our parents used to get pensions.

And I mean, really, if you're over maybe 50 years old right now, in today's age, you probably worked at a company that offered a pension at some point.

Well, anyone younger than that, pensions are done and gone with.

We don't get pensions anymore unless you're a state employee or a city employee or something of that nature.

Well, you go and work for a corporation, right?

Apple, Google, Microsoft, any Fortune 500 company, they don't offer pensions to their employees.

Instead of the pension plan, they offer 401ks, 403Bs, and things of that nature.

Well, unfortunately, you know, 401ks were never meant to be a retirement account.

You know,

there's videos out there on, if anyone wants to look up Vanguard 401k, the CEO of Vanguard was talking about how these, it was not meant to be a retirement account.

It was not meant to be a savings plan.

But companies, the incentives for a company to offer a 401k plan to their employee are so great that they just replace the pension plan with 401ks because they get a write-off everything that they match with their employees and they get fees on the back end for any, if employees put, you know, let's say a million dollars for the year into a 401k plan, the insurance company gets a certain fee percentage based on the amount that goes into the plan.

I didn't know that.

Because it's not the employer that's sponsoring the plan, or they're sponsoring the plan, but it's a third-party administrator, like a, you know, a Fidelity Investments or Lincoln Financial, a third-party financial institution that's actually overseeing the account.

And then they split off the fees at the end of the year with the company.

Yeah.

So a write-off, you get a fee.

I mean, why would an employer not offer a 401k plan to an employee?

No brainer.

No brainer.

But 401ks, IRAs, here's the thing, man.

How old are you, Sean?

27.

27?

I'm 27 as well.

I mean, you are locking your money up until you're 59 and a half if you put money into a 401k.

So, you know, people, people use 401ks because they work at a corporation and they think, hey, my, my coworker is doing it.

My manager's doing it.

This, that, and the other.

And they just kind of follow the herd and they think, hey, this is what I should do.

This is what I should.

This is what everybody's doing.

I should do it.

Well, you know, unfortunately, the education is not out there.

And there's, and again, there's no incentive for a company to be like, hey, go check out some alternative vehicles for investment, like cash value, life insurance.

There's no incentive.

They don't make any money on that and they don't get a tax write-off on that.

So, you know, you put money into a 401k, let's say, and you work for 30 years.

Well, you're locking that money up until you're 59 and a half.

And I hate to tell you, man, but savvy investors, they don't purposefully lock their money up for 20, 30, 40 years where it's not accessible.

You know, think about 2008, 2001, COVID, 2022.

The people that got super wealthy in those times were people that had accessible money, right?

Not necessarily cash, but liquid money, where they were able to jump on the opportunities.

if your money's locked up in a 401k you can't you can't do anything with it until you're 59 and a half unless you want to pay a 10 federal penalty taxes fees and all that other stuff yeah and i've borrowed from my 401k before not for any you know emergency or dire need but when i was 22 i wanted to buy some real estate um i just got back from a year in kuwait i was out there as a contractor for lockheed martin wow yep so i made some good money i was an idiot i didn't know any better i put 70 of my income into my 401k for the year yep 70 and i just maxed it out as much as i could possibly put in there because i thought that was what you should do um so i came back had about a hundred thousand dollars my 401k tried to access it to go buy a rental property when rates were like 2.75

and uh they didn't let me didn't let me touch my money really they said unless you're getting foreclosed on or unless you're getting evicted or unless you had a death in the family member where you lost income household income you can't access your 401k wow and you had to prove it in order to you know because of course i tried getting around

but yeah hey i'm getting foreclosed on like okay okay, show us the foreclosure paperwork.

And I didn't have it, so they wouldn't let me access the money.

Yeah.

Yep.

So on top of all the taxes, fees, and penalties, which probably adds up to 40 or 50% of what you're trying to borrow, it's just like jumping through hoops trying to get the money.

Yeah.

Yep.

And with the cherry on top with all that is the money is exposed to the stock market, man, you know?

And 8% a year, as I said earlier, it sucks.

And that is all you're going to get in a 401k.

Most 401ks are just invested in things like mutual funds, ETFs, you know, S ⁇ P 500, things like that.

And those only grow at 7% or 8% percent a year.

So if you're expecting your 401k to be your end-all be-all for retirement savings, you are, you're shooting yourself in the foot.

Absolutely.

You know?

So what percent per year do you aim for with your investments?

So I try to, any finance person would say to put away between 10 and 15% of your annual income into a retirement savings type of plan, you know, money that you're safe money.

So if easy math, if you're making $100,000 a year, you should be aiming to put around $10,000 or $15,000 away into a retirement account.

Now, of course, that's really situational.

It's a case by case because if you have seven kids, well, chances are you're not going to be able to put in as much as someone who's single and has no really financial responsibilities.

But I would say comfortably, if you can put in somewhere in the middle, maybe 12, 13% of your income into a retirement plan while you're working and while you're making money,

you should be all right.

It should net you about 80%.

of whatever you were making when you were working while in retirement.

So if you were making $200,000 a year while working, you should be able to pull out about about $160 a year in retirement if you're continuously putting between 10% and 15% away.

Got it.

That's how it works.

And that's taking into account growth and stuff like that.

But that's just average growth.

That's based on a 7% or 8% return in the stock market.

If you use other vehicles, I mean, think about real estate, 7% or 8% in real estate.

That's, I mean, real estate historically, it consistently returns 20%, 30, 100%.

A year?

Yeah.

Holy shit.

If you look at like HGTV, you know, the fix and flip show on HGTV.

If you take out your calculator when you're watching that show, well, you'll see that like these guys are getting like 40, 50, 80, 100% returns in three months on their money.

That's crazy, you know?

And people, people hear that and they're like, there's no way that's too good to be true.

But of course, because you think that seven or eight percent is great, because that's what you've been told.

But if you invest into things like a real estate investment trust, a REITs, they're called REITs, right?

Or real estate funds, even private real estate companies, sure, there's probably a little bit greater risk because it's a private company.

People aren't as comfortable because they're not traded on the New York Stock Exchange always.

But I mean, you know, it's not unreasonable to get a 20% return in a self-directed IRA, even, or, you know, just a private brokerage account if you're invested in real estate.

Yeah.

That's great advice because people are so programmed for seven to 10% a year.

Yep.

And that's hard to live off of after taxes, like you said.

It's terrible.

Yeah.

I mean, and I'll tell you, I'll tell you what, Sean, the average person, 65 years old as an average retirement age right now, the average person in America, I believe, retires with right around $280,000 in their 401k.

So if you're 65 years old, well, well, the average life expectancy right now in the U.S.

for a male is 86 and a female is 88.

Wow.

So you're talking like a 20-plus year time horizon.

How much can you pull out per year with a $280,000 401k if you're going to live another 20 years in retirement?

I mean, do the math on that.

It's like, what, 1,000?

That's like, yeah.

$1,000 a year?

That's like, yeah, like, like, yeah, like, I don't know, $7K a year or something like that.

Yeah.

Terrible.

So that's pretty tax too.

So, you know, sure, the money's going to continue to grow and things like that, but put one market crash in there, put one market correction in there, and you're toast, man.

You're toasted.

There's no way.

So, there are just so many other options out there.

And people are just, they're so set in their ways.

And there's, people like to be told what to do.

And so, like I said, when you go and work for a company and they say, hey, invest in the 401k, it's not required, but hey, we offer a 401k match.

That's just what everybody does.

And if I could just, you know, my, my mission is really to leave people better than I found them.

And I really, really, really want to help middle America.

But the issue I have with middle America is that they are so set in their ways, you know, and that is unfortunately why a lot of them drop into the lower class.

And especially in retirement, they just rely on things like social security and whatnot because they didn't do things differently than all their peers were doing.

So they ended up like all their peers.

And we know that most of America lives paycheck to paycheck.

Right.

Wealthy people, they didn't, they don't use 401ks.

They don't use IRAs.

I can, I could, you could probably count on one hand how many billionaires have a 401k because it's probably zero.

That's correct.

You know what I mean?

Because they don't even qualify for things like that.

And, you know, for those of you listening, right, Roth IRAs, I just want to point one thing out.

Roth IRAs are more beneficial than a 401k in the sense that the money does grow tax-free, right?

You're putting after-tax money in there, and then all the interest is tax-free.

But the problem with the Roth IRA is you're still locking the money up until you're 59 and a half, and it has stock market risk.

So a Roth IRA, I mean, you're still looking at that 7% or 8% growth on average, unless you're like day trading or something in it in the account.

Yeah, middle class is being wiped out.

So you don't even invest in stocks?

Nope.

I have no securities.

I have no security positions.

Nope.

I don't believe in.

I mean, I don't want to say I don't believe in the stock market.

I've been invested in the stock market before.

It's a great place to make money if you're investing in AMC or GameStop.

But it's just one of those things that

if you're okay just with a seven or eight percent return and realizing that, hey, by the time you retire, you're going to be living on probably 25% of your income or less, then sure, just keep investing in the stock market.

But if not, if that's, if that doesn't, you know, make you, if that, if you can't sleep at night think knowing that, well, I would say that look into other options such as REITs and just cash value life insurance and things of that nature, because, you know, you can get returns that are pretty much uncapped.

But with cash value life insurance, one thing I want to point out is that when the market goes negative,

you're guaranteed a 0.25% positive return.

So the insurance company is basically giving you a contractual guarantee that no matter how bad the market does, whether it's down 1% or 50%,

you'll actually earn a positive 0.25% in those years.

So, you know, depending on how you're indexing the money in the policy, you could, you, you can be, you know, invested where you're getting uncapped returns.

So you can get 30, 40% in a year in a life insurance policy if it's invested properly.

Wow.

But you're limiting yourself on the downside.

And so, you know, think about the guys in 2008 when the market was down 40%.

You had a million dollars in a 401k and you lost 40%.

Well, that's dropping to 600,000.

So fast forward to the following year, let's say the market was up 15%.

Is 15% on 600K better than 15% on the guy that kept his million because he had it in a life insurance policy?

Yeah.

You know, you're never going to catch up to the guy that has, it's protected on the downside, like he is, like you are with insurance products.

Yeah.

Yeah.

If you can achieve 20% a year, I mean, if you put in a million, that's 200K a year.

Most families could live off that.

Exactly.

And that, and, and again, that's tax-free interest in an insurance policy.

It's tax-free.

It's all tax-free.

Wow.

So when you, when the money grows, it's tax-free.

When you...

you know, borrow against it, it's tax-free.

You know, you can, you can borrow against it throughout, throughout the period of, you know, of funding it.

And then, I mean, or not, you know, but the money there is completely liquid.

It's completely accessible at all times.

So there's a stigma around life insurance, right?

When people meet me,

I was just talking to,

what's his name?

Sorry.

I was just talking to him.

He was, you know, he was, I was talking to a guy earlier.

He goes, yeah, you know, I said, I'm a financial strategist.

He goes, okay, so you sell life insurance.

And I'm like, I do, yeah.

Which is interesting because a lot of people think financial strategy is the same thing as a financial advisor, things like that, but it's not.

I'm not securities licensed.

So the difference between a financial strategist and a financial advisor is we use different products like cash accumulation policies that are backed by insurance companies.

If I just go up to you, Sean and I'm like, hey, I sell life insurance.

Well, you already have a stigma in your head of, oh, okay, this guy's, maybe he's a little scammy.

Maybe he's a little, you know what I mean?

Because it's just any insurance, really, whether it's car insurance, home insurance, life insurance, it just gets a bad rep.

The industry as a whole gets a bad rep, unfortunately.

So I do use life insurance products, that's for sure, but I'm not using it for the purpose of, hey, just, you know, God forbid you die, your family's protected.

That's a huge plus.

I'm using it for all the other benefits that people just don't know about.

Yeah, it gets a bad rep because of the salesman trying to push the sale too hard for cash.

Yep.

But there's real, real products out there that can serve people for sure.

Yeah.

And really, it's just about finding someone that can structure it properly, you know?

Because again, I'm not saying that every insurance person is ethical because there's a lot of younger insurance salesmen that they might just try to structure it in a way that benefits them and their commission check, which is why also it gets a bad rep.

But if you work with someone who you can trust and who's ethical and really takes the time to understand your situation and why you're even using this type of product for investing, well, and can explain to you too, why things are the way they are.

You know, why is the death benefit 500K?

Why is it not a million?

And there's reasons behind all of that.

And if your insurance agent or whoever's helping you out with getting into a product like this can't explain that, I wouldn't do business with them.

Absolutely not.

Yeah, absolutely.

You know, and I share, I share how much I make with every single one of my clients.

Wow.

Because there's nothing to hide.

Transparency.

And my favorite thing is, you know, the difference between a financial strategist and a financial advisor is I get paid.

I just don't get paid by you.

I love that.

Let's talk multi-generational wealth.

So I just finished a book, Die with Zero.

You probably have an opposing view to that book, but what's your strategy with handing off money to your kids?

Because I believe 80% of families lose their money by the third generation, right?

Yep, absolutely.

Absolutely.

So multi-generational wealth is one thing, but with multi-generational wealth, my main focus with families is to build the educational aspect too.

So the reason most families do lose all the wealth by the third generation is because the generation below them and the generation below that, you know, they don't have the education to continue creating the generational wealth and they just end up blowing through all the money.

That's the problem.

So sure, your parents can leave you $20 million, but you know how quick you can blow through $20 million.

Right.

I mean, that can be gone in a year.

With multi-generational wealth, you know, again, insurance products are amazing for that.

The Rockefellers, for example, right?

You're talking nine, 10 generations ago.

Well, one of the Rockefellers, John himself,

he had a $10,000 life insurance policy.

You know, $10,000 back 100-something years ago was a lot of money.

But, you know, $10,000 life insurance policy passed it on to his child when he died.

And that child had a $25,000 life insurance policy.

Next one, 50, 100, 500, a million, so on and so forth.

So using, you know, insurance-related vehicles to build generational wealth is probably the easiest way without

having to worry about building a successful successful business or having thousands of units worth of real estate.

Because think about it.

You're paying, let's say, a couple hundred bucks a month for a $2 million life insurance policy.

Well, when you're no longer here one day or if you don't make it home from work tomorrow, your family's left with $2 million tax-free when you're gone.

So whether you had assets or not when you died,

it's okay to spend all your money and die with zero.

It is okay because that insurance policy is going to pay your family and protect them from a financial standpoint when you're no longer here.

And the last thing anybody wants to be Sean when they pass is a financial burden on their family.

Agreed.

You know, and no one's promised tomorrow, right?

We have people that are two years old dying, and we have people that are 97 years old that are dying on a daily basis.

And it's so what I would say is, you know, you don't know if you're going to make it home tomorrow.

And think about a typical family dynamic where you have a mother, a father, maybe a couple of kids.

Well, if mom and dad are both making $100,000 a year, their household income is $200K.

Well, when you're making $200K a year as a family, you get accustomed to living a lifestyle with a $200,000 income.

If one of them don't make it home, well, that income drops to $100,000.

If there's no insurance protection or anything in place from that standpoint, I mean, there's going to be some struggles.

The bills don't drop by 50% because dad is no longer here.

So what are you doing to protect your family from that standpoint?

And for anybody with a spouse or kids or anybody in their life that's dependent on their income, it is extremely crucial that they have some sort of protection in place because, you know, I believe Andy Elliott once said, he goes,

um you know if you were on your deathbed today would you be able to write your family a check for two million dollars if not you need life insurance you know and that's his that's his sales page right quote yeah but i mean for real i mean think about it right most people do not leave anywhere near seven figures behind for their family but if you have life insurance protection, I mean, you can easily do that.

And then if you educate your children on kind of like what they should do with an inheritance or a lump sum of money like that, well, then they can continue to build wealth, right?

And turn something that was terrible and tragic into something positive.

And And then they will just leave more family behind for their generation.

And that's kind of the idea of multi-generational wealth.

So it's not just about leaving the money, man.

Money doesn't replace someone, but it's about what's done with the money.

It's about the education that's behind the money and why that money was left and what the purpose of it was.

Yeah, that's such simple advice.

Just open up a life insurance policy.

That's it, man.

People overcomplicate it.

It's super overcomplicated, man.

And there's so many benefits that, you know, that come with having a life insurance policy, right?

Like I said, I mean, if you wanted to borrow, if you had a $2 million policy and you had, let's say, $100,000 worth of cash value in there, well, Walt Disney himself borrowed from his cash value life insurance policy, and that was what kept Disney alive.

Wow.

I mean, everyone knows Disney today, right?

It's a multi-billion dollar company, and if not trillion, at this point.

And the only reason it's still alive is because Walt had a properly structured cash value life insurance policy in place, and he was able to borrow money against it and fund his business, you know, when it was about to go bankrupt.

So that's just, that's just, you know, the generational wealth is amazing and it's awesome.

But like the fact that life insurance can do so many other things and serve someone on so many other facets, I mean, it's just, it's a no-brainer.

You know, it covers getting sick, it covers dying, and it covers living too long.

Wow.

Because with a life insurance policy, the money and the policy, I mean, you can't outlive it.

If you start funding a retirement, a life insurance plan at 27 and until you're 65, well, that plan, Sean, will pay you like a pension tax-free until the day you die.

if it's structured properly.

Wow.

And it doesn't matter if you live till 140 years old.

That is interesting.

So do you even need health insurance when you have that?

I mean, a lot of life insurance plans actually come with long-term care benefits as well.

Oh, wow.

So, health insurance is one thing.

You know, it depends.

It depends on how much money you're making.

A lot of wealthy people don't even have health insurance because it's like, I could just pay out of pocket for whatever, you know?

But so that's one thing.

I wouldn't be opposed to saying that someone should have health insurance, but if you ever get really sick, you know, God forbid you ever need to be in a nursing facility, have in-home nursing care, the doctor tells you you have 12 months to live or less.

ALS, heart attack, cancer, stroke, there's like 18 different triggers.

If anything ever ever happens to you, well, you know, being in a nursing home is not cheap.

I mean, it could be 10, 20 grand a month.

Well, having that, you know, having your family have to pay for that or having the policy pay for that, I mean, which one would you rather choose?

You know, and if you have a life insurance plan, properly structured one, well, the plan will pay for you until the day you die while you're in the home or while you need the long-term care.

Absolutely.

What's your plan with your kids on leaving money?

Do you, do you want a trust fund set up?

How do you want to do it?

Yeah.

So, you know, I actually just got married two days ago.

Corrupt.

Got my ring on.

Let's go.

Yep.

Just got married two days ago.

And

so, you know, with my, I don't have any children yet, but when I do have children one day, I do have life insurance in place right now.

God forbid something happens to me, knock on wood, my wife would be taken care of.

She'd be able to pay some of our debt off, house, mortgages and stuff like that, you know, and then not have to worry about things for at least 10 years.

Wow.

So I think that every person, and this is a controversial topic in the life insurance industry, but I think every single person should have at least 10 times their annual income worth of life insurance coverage.

So if you're making $100,000 a year, you know, and you're bringing home money to the family, you should have at least a million dollars worth of coverage.

Because if you die and you don't make it home, well, your wife or your spouse or whoever should be able to cover the income for at least 10 years, you know, and that's kind of extreme, right?

I mean, you would think in 10 years, someone would be able to get back on their feet and kind of, you know, be done,

you know, mourning the death of you, but, you know, you never get over the person, truly.

But

the logic behind it is just to be able to like give yourself a buffer to be able to not have to worry about, oh, scrambling to find out, hey, how am I going to pay for things?

How am I going to afford the bills and things like that?

So with my kids, it really depends on how many kids I have.

Probably going to have a few, probably three or four.

But really, I think that when it comes to kids,

you should have about 25% of your annual income to cover each child.

Wow.

You know?

So it goes to all the kids.

It goes to all the kids.

Yeah.

Cause think about it.

If you have four kids, right?

You're making $100,000 a year again.

Well, you know, 25% of 100K is 25,000.

And then, you know, you got four kids, that's 100,000, right?

Well, like I said, that should last you for 10 years.

So if you're making $100,000 a year, if you have a wife and four children, you should have at least a million dollars of coverage for your wife, which is 10 years worth of your income, and then 25% for each child for another 10 years.

So if each child is 25K, that's 100K times 10 is another million dollars.

So a guy, a male making $100,000 a year and with a wife and four kids should have about $2 million worth of coverage on himself.

God forbid something happens.

And that'll be 10 years of safety.

10 years of safety for the wife and the children.

Right.

It's tax-free.

Tax-free, interest-free.

And also, have you ever heard of probate?

I have, but I don't know what it is.

So, probate, basically, with probate, it's a terrible process.

But when someone dies, all of their assets, all their belongings, everything like that goes to the state, becomes public record.

Got it.

Every state has a little bit of a different process, but really in probate, the only people that get rich are attorneys.

So if you died and you had a million dollars to your name and 401ks and real estate and things like that, before your family sees anything, before the beneficiary sees anything, it has to go through the probate process, which could take between two and five years.

Are you serious?

Yep.

And then think about all the attorney fees and all that stuff.

So your wife and kids might not see that money for two years.

And when they get the money finally, after taxes and all that other stuff, they might be left with 50% of it.

Holy crap.

Well, life insurance payouts, they legally bypass probate and they're paid out immediately after the insurance passes.

That alone is worth it.

Yep.

I mean, waiting two to five years could be detrimental to the family.

Absolutely.

Absolutely.

Holy crap.

I can't believe they do that.

Is it above a certain income level they they do that or it's for everyone?

It's just, it's for everybody.

Dude.

Yep.

Yep.

So you just have to, you know, that's another benefit to life insurance is you just have to have proper vehicles and proper structure in place because granted, you know, all of your assets might not be protected from probate, but at least if you have the life insurance money, for example, protected, right?

And that's, you know, your family's going to get a minimum amount at least to hold them over.

Yeah.

Well, at least you, you can, you know, you can sleep on that.

That's crazy.

Does this get around death tax too?

Are you talking about a state tax?

Yeah.

2% or whatever.

Yeah.

So

yes and no, it just depends.

Now, death tax is one thing, but

I'm glad you brought that up because estate tax is a whole nother animal.

I don't know if you know what estate tax is, but basically it's also known as inheritance tax.

Well, inheritance tax as of right now is $12.92 million, meaning if your family, right, your parents or whoever leave behind more than $12.92 million, 40% of it is sliced right off the top.

No way.

40%.

Holy shit.

I mean, you're talking $4 or $5 million.

Yeah.

Right off the top just for dying, just for dying.

Yep.

Now,

in 2026, they're actually dropping it to around $7 million, the estate tax, right?

Which is not good because think about it.

Now, instead of having that buffer up to 12.92,

if your parents were going to leave you 9 million, well, before you wouldn't get hit with that 40%.

But now, since it's dropping to 7 million, anything 7 million or above gets taxed at 40%

right off the top.

Yeah, 40%.

Uncle Sam gone.

Goodbye.

Kiss it.

Bye-bye.

Now, with that said,

that life insurance is protected from that as well.

But, you know, like it doesn't, it doesn't get taxed.

It's tax-free.

But there are other vehicles that you can use, such as charitable LLCs and things like that.

And this is really where the financial strategy comes in.

Now, we've talked a lot about life insurance here, but life insurance products and vehicles and accounts are just one piece of the pie here.

When it comes to strategy,

if you're a business owner, if you have a tremendous amount of real estate assets or something like that, you can open up things like charitable LLCs.

And charitable LLCs basically reduce your tax liability by 80% when you sell something.

So if you're, if you have a capital gains of, let's say, a million bucks, if you sold some real estate and you have a capital gains of a million bucks, capital gains right now is 20%, right?

So you're looking at $200,000 tax liability, right?

Well, if that is transacted within a charitable LLC instead, your a million dollar capital gains tax liability immediately drops by 80% to a $200,000 tax liability.

So instead of paying 20% on a million, you're paying 20% on 200K.

Wow.

Just because it's transacted within a charitable LLC.

That's correct.

So this is, I brought that up because this is a way that wealthy people that are way above that estate tax limit protect their

tax liability and

things like that.

And another thing too is, I speak to guys that have 10 million plus, you know, all day, every day.

And these guys are like, hey,

I'm okay on income.

I don't need the income for my life.

I'm in my 70s or 80s or whatever.

I'm going to be fine until I die.

But when I do leave this earth one day, I'm really worried about the liability.

I'm going to be leaving my children because of that, that inheritance tax and things like that.

Well, if you're someone who has children or someone who

has a fortune

and is going to be above that $7 million limit, well, you really should start considering and thinking about

putting your money into different vehicles where it's protected from the estate tax.

And insurance is one of those vehicles.

So, I mean, it keeps coming back to insurance, life insurance, right?

And people just don't realize how many benefits come with life insurance.

It's not, it's legal.

So you're not hiding money, but you're burying money, if that's a good word to use, into an insurance plan where the money is accessible and you have full control over it until the day you die.

So say, you know, your parent, your, your dad, let's just say had 10 million bucks, right?

And he didn't want to leave you with a nasty 40% inheritance tax.

Well, he could fund a plan for you while he's alive.

And basically, you know, he could fund a plan for you for the, let's say he lives another 10 years.

Well, those 10 years, he's funding a plan for you.

He has full control over the money the entire time.

You would be the insured and he would be the owner of an insurance policy.

So he'd have access to the money.

But then when he's no longer here, you just basically take place of him.

Wow.

But it's not like he loses control of their money because that's one problem with people is, and you kind of mentioned earlier with the, you know, not leaving any money.

What's the point of, why would you take the money to the grave?

You know, you want to use the money while you're alive, of course.

And some people don't even have children.

But hear me out.

Would you rather leave the money to Uncle Sam?

Or if you don't have family, would you rather leave it to things like maybe like a charity or something like that?

You know, because Uncle Sam will be all over your

estate

once you're dead, whether you have children or not.

Because again, everything kind of becomes public record when you die, if it's not structured properly.

And like a lot of people, they know how to make money.

I got a guy I know that he makes like two, three million bucks a year.

He just has no idea what to do with it.

And he just pays $600,000 a year in taxes.

I mean, it's insane.

And he's been doing that for five or six years.

So it's just like, you know, not doing anything different than he's currently doing.

He's just using a different strategy

with where his money goes and kind of like how his income flows.

it would just, it would change his, his game entirely.

He'd be able to probably keep $500,000 and save $500,000 in taxes in this situation.

So how can people consult with you?

And do you take on clients at the moment?

Absolutely.

Absolutely.

So

I take on clients.

And if not me, my team will take on clients.

The easiest way to reach me would be my social media.

My Instagram handle is Lottie underscore Dottie.

That's L-A-H-D-E underscore D-A-H-D-E.

Can't miss it.

And, you know, besides that, I also, I have an email address on my Instagram as well and a phone number.

I put my personal cell phone number out there as well because, you know, I think that having that personal, that one-on-one connection with any client,

whether they're a client, whether they're a business partner, it just gives someone that sense of security.

And having that access to you is a big thing.

I know that it makes me comfortable when I'm doing business with someone.

But yeah, you can reach me on Instagram, social media,

email, phone number, all of that's on the Instagram page.

Cool.

We'll link below.

Thanks for coming on, man.

Yes, sir.

Appreciate you, you, Sean.

Yeah, thank you so much, man.

For coming on.

Thanks for watching, guys, as always.

See you tomorrow.